Tuesday, December 30th
Tuesday’s bond market has opened in negative territory, erasing yesterday’s gains. Stocks are also showing early losses with the Dow down 107 points and the Nasdaq down 34 points. The bond market is currently down 8/32 (4.13%), which should cause a slight increase in this morning’s mortgage pricing.
8/32
Bonds
30 yr - 4.13%
107
Dow
48,354
34
NASDAQ
23,439
Trailing 90 Days - National Average
Low
Neutral
There again is no relevant economic data for the markets to digest today. We can expect to see some movement in bond prices throughout the day, but likely not a change in rates.
Medium
Unknown
We will get the minutes from the December 9-10th FOMC meeting this afternoon. Traders use these for insight into the Fed’s thought process and to help predict future monetary policy moves. We will learn in more detail what the Fed feels about inflation and the employment sector and why each member voted the way they did. It is one of those reports that may cause volatility in the markets or be a non-factor, depending on what they show. However, the last FOMC meeting was followed by revised Fed predictions and dot plot, so the possibility of seeing something unexpected is somewhat minimal. The 2:00 PM ET release means if there is a reaction, it won’t come until mid-afternoon hours.
Medium
Unknown
Tomorrow brings us last week’s unemployment figures at 8:30 AM ET. They are expected to show 218,000 new claims for jobless benefits were made. This would be an increase from the previous week’s 214,000, signaling the employment sector weakened a bit last week. Favorable news for mortgage pricing would be a higher than predicted number of initial filings. We don’t usually put too much weight into this weekly update, but the lack of other relevant data this week could cause a stronger than normal reaction to a surprise in it.
Low
Unknown
Also worth noting is tomorrow’s early close in the bond market. Bonds will trade until 2:00 PM ET tomorrow and will be closed Thursday for the New Year's Day holiday. Stocks do not show an early closing tomorrow but will also be closed Thursday. Don't' be surprised to see a bit of volatility in the bond market tomorrow while mortgage rates remain relatively flat (assuming weekly claims data is neutral). This is because many traders are likely to be home for another extended holiday weekend, leaving a reduced staff in the office.
If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Lock if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.