Wednesday’s bond market has opened in positive territory to recover yesterday’s late afternoon weakness. Stocks are showing early gains with the Dow up 423 points and the Nasdaq up 288 points. The bond market is currently up 5/32 (4.27%), which should keep this morning’s mortgage rates close to Tuesday’s morning levels. If you saw an intraday increase in rates just before closing yesterday, you should see an improvement this morning of about the same size.

We have no economic releases to watch this morning, leaving Middle East news to drive bond trading. The latest batch of headlines came late yesterday and continue to come in this morning. We saw bonds lose ground late yesterday when it was announced that neither Vice President Vance nor representatives from Iran would be going to Pakistan for peace talks. Comments from President Trump that indicated military action would resume if an agreement was not in place. This led the markets to believe the war would resume at any time, causing oil prices to spike and inflation to rise.

That scenario was followed shortly after by President Trump announcing an extension of the ceasefire while also hinting that Iran would be presenting a peace plan. This led to bonds recovering a good part of the losses during after-hours trading that were caused by the earlier headlines, leaving us unsure of what to expect this morning.

Then news broke that Iran has announced they have seized two ships in the Strait of Hormuz and that the Iranian Navy disabled a third. This should have tipped the scales to a negative open in the markets since it shows the Iran is attacking ships in the strait and further restricting the flow of oil and other shipping through it. However, a clarification that President Trump is extending the ceasefire by 3-5 days is allowing for a positive open this morning. That said, let’s see what the headlines from the region bring throughout the day. It is quite possible that we will see more volatility sometime today.

Today’s only scheduled event is the 1:00 PM ET results announcement of the 20-year Treasury Bond auction. If the results show there was a strong demand for the securities, we could see bonds improve this afternoon, possibly leading to a minor improvement in mortgage pricing. On the other hand, a lackluster interest from investors could cause a slight upward revision to rates before the end of the day.

Tomorrow has only last week’s unemployment figures scheduled for release. Analysts are expecting to see 211,000 new claims for jobless benefits were filed, up from the previous week’s 207,000 initial filings. Rising claims are a sign of employment sector weakness that makes bonds more attractive to investors. Therefore, the higher the number tomorrow, the better the news for mortgage pricing.

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.