Tuesday, December 5, 2017

Tuesday, December 5, 2017 What's going on and why does it matter? Mortgage bonds seem to be cautiously making a rebound toward their 200-day moving average. There are several factors that seem to be making bonds relatively attractive for financial market investors at the moment. There is some risk to the Republican tax plan as the Senate and House still need to reconcile their different versions of the bill.  Also, there is the potential for a government shutdown at midnight on Friday if Congress is unable to agree on an extension in the debt ceiling. Additionally, there are ongoing headlines on special counsel Mueller’s investigation into Russia meddling in the US presidential election. All these items are causing uncertainty in the market, which tends to be favorable for bonds.  The Fed is a heavy buyer of bonds this week, and they are scheduled to purchase up to $1.405 billion of GNMA mortgage bonds today. What should you do about it? Watch for mortgage bond prices to continue their rebound toward their 200-day moving average, but be prepared to lock your rate quickly if the market changes directions.       Economic reports that may impact mortgage rates this week: Date Report Period Prior Est. Actual Mon 4 Dec Factory Orders Oct 1.4% -0.4% -0.1% Tue 5 Dec ISM Non-Mfg PMI Nov 60.1 59.1   Wed 6 Dec ADP National Employment Nov 235k 190k   Thu 7 Dec Initial Jobless Claims Week of Nov 27 238k 240k   Fri 8 Dec Non-Farm Payrolls Nov 261k 198k   Fri 8 Dec Unemployment Rate Nov 4.1% 4.1%   Fri 8 Dec Average Earnings Nov 0.0% 0.3%   Fri 8 Dec U of Mich. Consumer Sentiment Dec 98.5 99.0