Sample Commentary Report




Wednesday’s bond market has opened up sharply due to news from overseas and heavy stock weakness. The major stock indexes are posting sizable losses during early trading, pushing the Dow lower by 460 points and the Nasdaq down 95 points. The bond market is currently up 30/32 (1.61%), which brings the 10-year yield to its lowest level since late September 2016. This should improve this morning’s mortgage rates only slightly though if comparing to Tuesday’s early pricing.

Preventing more of a change this morning is weakness from late yesterday that is offsetting a good part of this morning’s potential rate improvement. Even though many Treasury securities did well yesterday afternoon, mortgage bonds turned the opposite direction. They tend to stay in line with each other, but occasionally there is a disconnect and they move in opposite directions. That caused some lenders to revise rates higher near the end of the day. Many likely chose to reflect those losses in this morning’s pricing, leaving us with a smaller improvement in rates than we would normally expect to see in such a strong open.

More surprise news in the markets overnight is fueling this morning’s move, but a trade war is not the primary topic this time. Three different central banks lowered their key interest rates last night in what is equivalent to our FOMC moves. India, New Zealand and Thailand all made moves, indicating concern about the global economy. Central banks lower key rates to help boost economic activity and raise to slow or control growth. The move by three different countries after ours just a week ago signals that faith in the global economy is waning. Because bonds tend to be more appealing and thrive in weaker economic conditions, this was good news for the bond and mortgage markets.

There is no relevant economic data set for release today. We do have an afternoon event taking place that may have an impact on bond trading and mortgage rates later today. The 10-year Note Treasury auction is that event. Results will be posted at 1:00 PM ET, so if there is a reaction it will come during early afternoon trading. If demand from investors was strong, particularly from international buyers, we should see mortgage rates improve later today. However, lackluster interest in the securities could lead to a negative move in the bond market that could push mortgage rates slightly higher.

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…








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