Friday’s bond market has opened down sharply, following suit of overseas markets. Stocks appear ready to close the week on a negative note also with the Dow down 162 points and the Nasdaq down 251 points. The bond market is currently down 31/32 (4.37%), which should lead to an increase of approximately .375 of a discount point in this morning’s rates if compared to Thursday’s early pricing.

There is no economic data coming today that we need to be concerned with. That leaves the bond market to focus on geopolitical events. The uncertainty of energy costs and inflation from the Iran conflict, that obviously is going to continue longer than initially thought, is fueling the global bond sell-off. Furthermore, President Trump’s request for $200 billion to fund the war will likely push our deficit higher, meaning more Treasury debt will need to be sold to cover it. This has the benchmark 10-year Treasury note yield at its highest level since last July and mortgage rates at their highest point since last fall. Unfortunately, without an end in near and some well-respected bankers predicting oil costs going much higher from today’s level, we may see rates move higher before coming down.

Next week has little scheduled in terms of relevant economic releases, especially when compared to the past couple of weeks. There are only two monthly or quarterly reports that we will be paying attention to, one of which is dated and is unlikely to have a direct impact on rates. We have a couple of Treasury auctions midweek, but they are shorter-term security sales that often fail to move rates also. Fed-member speeches and public appearances get into full swing, including brief award acceptance comments tomorrow by Chairman Powell that should be a non-factor in the markets.

There is nothing of importance scheduled for Monday, meaning we can expect Iran news and oil/energy prices to drive bond trading as the new week begins. It is difficult to predict what the bond market and mortgage rates will do during times of geopolitical conflicts, but with little else to drive trading next week, it will likely be headlines on those topics that will cause mortgage rates to move higher or lower most days if no surprises come from the Fed-member speeches. Look for details on next week’s scheduled activities in Sunday evening’s weekly preview.

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.