Todays Commentary

Updated on December 12, 2018 10:32:51 AM EST
Wednesday’s bond market has opened in negative territory with stocks in rally mode. The major stock indexes are showing significant gains, driving the Dow higher by 314 points and the Nasdaq up 120 points. The bond market is currently down 7/32 (2.90%), which should cause this morning’s mortgage rates to be higher than yesterday’s early pricing by approximately .125 - .250 of a discount point.

November's Consumer Price Index (CPI) was released early this morning, revealing no surprises. It showed that the overall reading was unchanged from October’s level and that the core data (excludes more volatile food and energy prices) rose 0.2%. Both readings pegged expectations and showed that inflationary pressures at the consumer level of the economy are not rapidly rising. While the lack of an upward surprise is good news for bonds and mortgage rates, the fact they met expectations has prevented much of a reaction to the news.

We also have a Treasury auction scheduled this afternoon that has the potential to affect mortgage rates. 10-year Notes are being sold today. Results will be posted at 1:00 PM ET today, so any reaction will come during early afternoon trading. This will be followed by tomorrow’s 30-year Bond auction. A strong demand from investors could help boost bonds and lead to a slight improvement in mortgage pricing later today. On the other hand, a lackluster interest may lead to bonds extending this morning’s losses and possibly to an upward revision in rates.

Tomorrow has no monthly or quarterly economic data to be concerned with. Besides the 30-year Bond auction, we will also get last week’s unemployment figures. They are expected to show that 231,000 new claims for unemployment benefits were filed last week. Rising claims is a sign of employment sector weakness, so the higher the number tomorrow, the better the news it is for bonds and mortgage rates. However, because this is only a weekly snapshot, don’t expect mortgage rates to have a significant reaction.

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... Float 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.

 ©Mortgage Commentary 2018
Please E-mail us your opinion of this report


Get your Daily Commentary from Trojan Home Loans everyday!


Would you like to receive the commentary
on a daily or weekly basis?
Daily will send a copy Monday - Sunday.
Weekly will send only Sunday's weekly overview/preview.

Please be assured that we will not
share your email address with ANYONE. Just fill out the form below!!

Your name:

Your Email Address:

I would like the commentary sent
Daily      Weekly