Monday, June 5, 2017

What's going on and why does it matter? Mortgage bonds are trading near their highest levels of the year after last week's highly anticipated jobs report came out much weaker than market expectations. Financial markets may be cautious this week ahead of several key events: (1) the European Central Bank is scheduled to make a decision on European interest rates and monetary policy; (2) there is a general election scheduled in the UK; and, (3) former FBI Director Comey is scheduled to give testimony in Washington. The Fed will be supportive of the mortgage markets today with a scheduled purchase of up to $1.2 billion of GNMA mortgage bonds. It will be interesting to see if mortgage bonds can continue to trade above their 200-day moving average.  They closed above that level on Friday for the first time since the Presidential elections last November. What should you do about it?   Watch for mortgage bonds to continue trading above their 200-day moving average; but be prepared to lock your rate quickly if bonds fall back below that critical level. ..... ..... Economic reports that may impact mortgage rates this week: Date Report Period Prior Estimate Actual Mon 5 Jun Durable Goods (rev.) Apr -0.7% -1.2% Mon 5 Jun Factory Orders Apr 0.5% -0.2% Mon 5 Jun ISM Non-Mfg PMI May 57.5 57.0 Tue 6 Jun JOLTS Job Openings Apr 5.74M - Thu 8 Jun Initial Jobless Claims Week of May 29 248,000 240,000 Fri 9 Jun Wholesale Inventory Apr 0.2% 0.2% Fri 9 Jun Wholesale Sales Apr 0.0% -