• Friday’s mortgage rates should be lower by approximately .250 of a discount point even though most of this morning’s economic data was bad news for bonds. The bond market is surprisingly up 12/32 (4.19%).

• Stocks are in rally mode with the Dow up 582 points and the Nasdaq up 130 points.

• Yesterday’s 7-year Treasury Note auction went better than Wednesday’s sale. Investor demand was a bit stronger for these securities than the 5-year Notes. Bonds improved slightly after results were announced at 1:00 PM ET, but not enough to cause intraday revisions to mortgage pricing.

• This morning’s big news was June’s Personal Income and Outlays report. It showed that income rose 0.2% while spending was up 0.3%. Both of these readings were lower than expected, meaning consumers had less money to spend and spent less than thought.

• What the markets were more interested in was the inflation readings within the report. The Fed’s preferred inflation gauge- Personal Consumption Expenditures (PCE) index, actually gave more bad news than good. The overall PCE for June rose 0.1% and the annual reading slipped 0.1% to a 2.5% yearly pace, as they were expected to do.

• Both of the Core PCE monthly and annual readings exceeded predictions by 0.1% (up 0.2% and 2.6% respectively). Since the Fed relies mostly on the core data, we have to label these inflation readings bad news for bonds and mortgage rates.

• Posted late this morning was July's revised Index of Consumer Sentiment from the University of Michigan Index. They announced a reading of 66.4 that was a little higher than the initial estimate of 66.0 from two weeks ago.

• Next week starts light with nothing of importance scheduled Monday and just a moderately important economic report Tuesday morning.

• Things drastically change Wednesday afternoon when the FOMC meeting adjourns. That will be followed by the start of the highly important new month reports Thursday and Friday morning (ISM manufacturing and Employment reports).

• Look for details on all of next week’s activities in Sunday evening’s weekly preview.

• Visit our Daily Commentary page on our site for detailed explanations on current news that is relevant to mortgage rates.

 

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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.