Wednesday’s bond market has opened fairly strong, continuing yesterday’s afternoon rally. The stock markets are showing small gains with the Dow up 12 points while the Nasdaq has gained 6 points. The bond market is currently up 14/32, which should improve this morning’s mortgage rates by approximately .125 - .250 of a discount point.

There is no relev ant economic news scheduled for release today, leaving the markets to trade off yesterday’s news. The 10-year Note auction was met with a strong demand, leading to afternoon buying in bonds yesterday and this morning. This means that investors have a good appetite for U.S. bonds, which should help prevent mortgage rates from moving much higher in the immediate future.

The next piece of data comes tomorrow morning with the release of August’s Retail Sales report. It will give us a measurement of consumer spending, which is very important to the markets because consumer spending makes up two-thirds of the U.S. economy. Current forecasts call for a 0.2% decline in sales last month after July’s 1.4% jump. If we see a higher level of spending than is forecasted, the bond markets will most likely fall and mortgage rates will rise. However, a weaker than expected reading could push bond prices higher and mortgage rates lower tomorrow.

We will also see weekly unempl oyment claims tomorrow morning, but I am not expecting them to affect mortgage rates. It is expected to show 315,000 new claims were filed last week, but with the sales report coming out at the same time this data should have no impact on bond trading or rates.



If I were considering financing/refinancing a home, I would…. Float if my closing was taking place within 7 days… Float 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.
 
a la mode

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