July 12th, 2019 11:10 AM by T. Fanning
Last Updated: 7/12/19Friday's bond market has opened in positive territory despite another round of stronger than expected inflation news. Stocks are extending their rally, pushing the Dow higher by 159 points while the Nasdaq is up 25 points. The bond market is currently up 4/32 (2.13%), but heavy selling late yesterday will keep this morning's mortgage rates higher than Thursday's early pricing by approximately .250 of a discount point.Yesterday's 30-year Bond auction was worse than Wednesday's 10-year sale. The benchmarks we use to gauge investor demand showed a pretty weak interest in the securities. Once results were posted at 1:00 PM ET, selling started in the broader bond market. That led to widespread upward revisions to mortgage rates. The tone in the bond market was negative from the start of the day, but the auction results kicked it to a higher level that continued throughout the afternoon.This morning's release of June's Producer Price Index (PPI) gave us the unfavorable news. It revealed that the overall index rose 0.1% last month while the more important core data that excludes volatile food and energy prices rose 0.3%. Both readings exceeded forecasts by 0.1%, indicating that inflationary pressures at the manufacturing level of the economy were stronger than many had thought. Because higher levels of inflation make long-term securities such as mortgage bonds less attractive to investors and causes the Fed to be more aggressive with short-term interest rate hikes, we should consider this morning's data bad news for mortgage pricing.Next week has relevant economic data being released four out of five days with a couple days having multiple scheduled. However, only one is considered to be a major release and it starts the week's activities Tuesday morning. Monday is the only day of the week with nothing scheduled that may affect mortgage rates. Look for details on the week's complete calendar in Sunday evening's weekly preview.If I were considering financing/refinancing a home, I would....Lock if my closing were taking place within 7 days...Lock if my closing were taking place between 8 and 20 days...Lock if my closing were taking place between 21 and 60 days...Lock if my closing were taking place over 60 days from now...This is only my opinion of what I would do if I was financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.**http://www.hlmcolorado.com/DailyRateAdvisory
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