Wednesday’s bond market opened in negative territory following early stock market gains. The stock markets appear to be done selling, at least for the time being. The Dow is currently up 31 points while the Nasdaq has gained 10 points. The bond market is currently down 7/32, but I am not expecting to see much of a change in this morning’s mortgage rates due to strength late yesterday.

With no economic news due to be posted today, speeches of current and past Fed members seem to be in the forefront. Fed Chairman Bernanke’s comments regarding inflation rattled stocks and bonds earlier in the week while former Fed Chairman Greenspan’s comments to a Senate committee indicated oil prices have not had much of an impact on economic growth so far. Mr. Bernanke will be in the public spotlight again Friday, but he will be giving a commencement speech and likely will not affect the markets.

There is little factual economic data scheduled for release this week, but there is a 10-year Treasury Note auction for the bond market to digest. The Treasury Department will auction 10 year Notes tomorrow. It is common to see pressure in the bond market as investors sell holdings to prepare for the sales. This often leads to bonds pricing falling and an up tick in mortgage rates leading up to the auctions.

However, as long as the sales are met with a decent demand, investors often buyback after the sales results have been announced. This usually drives bond prices back to pre-auction levels. But, if the sales are met with a poor demand, the selling continues during afternoon trading and can easily create another upward adjustment to mortgage pricing.

The semi-relevant monthly factual report this week is due to be posted Friday morning. April’s Goods and Services Trade Balance data, which will give us the size of the U.S. trade deficit will be released at 8:30 AM. It isn’t likely to cause much movement in the markets or mortgage rates, but nevertheless forecasts are expecting to see a $65.0 billion deficit.

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 6 0 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.

a la mode