Rate Lock Advisory

Tuesday, October 8th

Tuesday’s bond market has opened in negative territory yet again. Stocks are showing early gains with the Dow up 19 points and the Nasdaq up 174 points. The bond market is currently down 6/32 (4.05%), which should cause a slight increase in this morning’s mortgage rates.

6/32

Bonds

30 yr - 4.05%

19

Dow

41,973

174

NASDAQ

18,098

Mortgage Rate Trend

Trailing 90 Days - National Average

  • 30 Year Fixed
  • 15 Year Fixed
  • 5/1 ARM

Indexes Affecting Rate Lock

Medium

Unknown

General Bond Trends

There is no relevant economic data driving trading this morning. Tomorrow begins the calendar events that may influence the bond and mortgage markets, but they don’t come until afternoon hours. Since one of them is the 10-year Treasury Note auction, we could see pressure in bonds tomorrow morning as traders prepare for the sale. There also could be some concern about what Thursday’s key inflation data will show, making it hard to see bonds rally tomorrow.

Medium

Unknown

Treasury Auctions (5,7,10,20,30 year)

Results of tomorrow’s 10-year Treasury Note auction will be announced at 1:00 PM ET. These auctions don't directly impact rates, but they do influence broader bond market sentiment. If there is a decent demand from investors, we should see strength in bonds during afternoon trading. However, a lackluster interest from investors- particularly international buyers, may cause rates to move higher. With the 10-year being a benchmark security and its yield currently over 4.00%, we could see a decent interest in the sale. The potential headwind is Thursday’s inflation data that could hurt bonds heavily if it shows stronger than expected results. This may keep some investors on the sidelines until after this week’s CPI and PPI reports are released.

Medium

Unknown

FOMC Meeting Minutes

Tomorrow’s second event will be the 2:00 PM ET release of the minutes from last month's FOMC meeting. These may move the markets or could be a non-factor, depending on what they show. One key point traders are looking for is how many more rate cuts the Fed will make over the next few meetings, especially at this year’s remaining two. The general consensus is that they will make a quarter-point reduction at both of those meetings. It is worth noting though, the last FOMC meeting was followed by revised economic predictions and a press conference with Fed Chair Powell. Therefore, the likelihood of seeing a significant surprise in the minutes is relatively low.

Float / Lock Recommendation

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.


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