Wednesday, June 28, 2017

What's going on and why does it matter? Mortgage bonds opened lower today in continuation of yesterday's sell-off.  Mortgage bonds are trading firmly below their 200-day moving average, which is now operating as a technical ceiling of resistance.  The recent decline in bond prices was triggered yesterday after President Draghi of the European Central Bank signaled that it may be time to start increasing interest rates in Europe.  Combine that with recent comments from the Fed, and it seems like global interest rates may finally start to move higher.  The Fed is scheduled to purchase up to $1.625 billion of 30-year conventional mortgages today, which may help. What should you do about it? Lock your rate to be safe, especially while mortgage bonds continue to trade below 200-day moving average. Economic reports that may impact mortgage rates this week: Date Report Period Prior Estimate Actual Mon 26 Jun Durable Goods May -0.9% -0.6% -1.1% Tue 27 Jun Consumer Confidence Jun 117.9 116.0 118.9 Wed 28 Jun Pending Home Sales May -1.3% 0.8% Thu 29 Jun GDP final est. Q1 2017 2.1% 1.2% Thu 29 Jun Core PCE Prices Q1 2017 1.3% 2.1% Thu 29 Jun Initial Jobless Claims Week of June 19 241,000 240,000 Fri 30 Jun Personal Income May 0.4% 0.3% Fri 30 Jun Core PCE Price Index May 0.2% 0.1% Fri 30 Jun Chicago PMI June 59.4 58.0 Fri 30 Jun U of Mich. Consumer Sentiment Jun 97.1 94.5