AM Market Update

Tuesday’s bond market has opened in positive territory even with no nothing of importance scheduled for release today. The stock markets are showing minor losses with the Dow down 12 points and the Nasdaq down 1 point.

There is no relevant economic data scheduled for released again today. After gains in bonds yesterday and this morning, the benchmark 10-year Treasury Note yield currently stands at 2.81%. This move started after Friday’s surprise in November’s Employment report, although it has come with no economic data. This bodes well for mortgage shoppers as rates tend to follow bond yields. However, we do get some key economic data later in the week that we need to be very cautious of.

Tomorrow doesn’t have any economic data set for release either, but we do have the first of this week’s two Treasury auctions that have the potential to influence mortgage pricing. 10-year Notes will be sold tomorrow while 30-year Bonds go Thursday. Tomorrow's auction is the more important one and will likely have a bigger influence on mortgage rates. Results of the sales will be posted at 1:00 PM ET each day. If they are met with a strong demand from investors, particularly international buyers, we should see strength in the broader bond market and improvements to mortgage pricing during afternoon hours. On the other hand, a weak interest in the auctions could lead to upward revisions to mortgage rates after results are posted.

November’s Retail Sales and Producer Price Index (PPI) will be released Thursday and Friday morning respectively. We will also get last week’s unemployment numbers Thursday morning, but the other two reports are expected to cause much more movement in the markets and mortgage rates.

 

Continue to float your rate, but look to lock towards the end of the week.