How I See The Market

Tuesday's bond market has opened relatively flat considering the past few trading sessions. The stock markets are showing early losses with the Dow down 32 points and the Nasdaq down 7 points. The bond market is currently up 2/32, but I don't believe this will be enough to cause much change to mortgage rates.

America's financial markets continue to watch closing events unfolding in Europe in regards to the Greek situation.  The Euro gained yesterday with the announcement of almost a Trillion dollars in bailout funds.  However, 24 hours later the Euro was again in decline.  In the meantime, markets are watching Spain with 20% unemployment, Portugal and Ireland all of whom have financial problems of their own and may need help from the EU and IMF. 

There is no relevant economic news scheduled for release today. This will leave the bond market and mortgage rates subject to stock market movements again. As long as the major stock indexes remain near current levels, I suspect that mortgage rates will follow suit. However, afternoon strength or selling in stocks could make bonds less or more appealing to investors and lead to afternoon changes in mortgage rates.

Tomorrow does bring us some economic data, but it is the week's least important news. March's Goods and Services Trade Balance report will be released early tomorrow morning, giving us the size of the U.S. trade deficit. It is ex pected to show a $40.5 billion trade deficit. This report likely will have little impact on tomorrow's mortgage rates unless it shows a significant variance between forecasts and its actual results.

10-year Treasury Notes will be sold tomorrow and could impact bond prices and mortgage rates. The 30-year Bond sale will take place Thursday. Results of the auctions will be posted at 1:30 PM ET each day. If they are met with a strong demand from investors, we could see bond prices rise enough during afternoon trading to cause downward revisions to mortgage rates. However, lackluster bidding in the sale could lead to higher mortgage pricing those afternoons.

The remaining three economic reports will be released Friday morning. This is when we will get April's Retail Sales data (highly important), April's Industrial Production (moderately important) and May's University of Michigan's Index of Consumer Sentiment (moderately important).

If I were co nsidering 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... Lock 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.