02/09/2018

Mortgage bonds are still trading near their worst levels of the year at the end of what has been a very volatile trading week.

Financial markets this week have been pre-occupied with fears of potentially rising inflation, increasing bond supply due to massive government deficits, and decreasing bond demand from the Fed and other Central Banks.

Rising interest rates in the global bond market are also continuing to pressure US mortgage rates higher. The Fed is scheduled to purchase up to $840 million of GNMA mortgage bonds today, and they'll be back in the market on Monday with a sizable purchase of 30-year conventional mortgage bonds.
 

Tuesday, February 6, 2018

What's going on and why does it matter? Mortgage bonds were beneficiaries of the global stock market sell-off yesterday as investors plowed money into the safety of bonds in order to wait out the storm. Today, however, mortgage bonds are giving back some of their gains from yesterday's rally, and market participants may look for some stabilization before mortgage pricing gets too much better.  Much of yesterday's selling pressure in the stock market was due to automated triggers, so it's hard to tell whether the stock market sell-off will continue today.  The Fed is scheduled to purchase a sizable $1.31 billion of 30-year conventional mortgage bonds today, which may help. What should you do about it? Trying to time the market in times like this is a bit like trying to catch a falling knife. So, it may be best just to play it safe and lock your rate. ..... Economic reports that may impact mortgage rates this week: Date Report Period Prior Est. Actual Mon 5 Feb ISM Non-Mfg PMI Jan 55.9 56.5 59.9 Tue 6 Feb JOLTS Job Openings Dec 5.879M 5.90M Thu 8 Feb Initial Jobless Claims Week of Jan 29 230k 238k Fri 9 Feb Wholesale Inventories Dec 0.2% 0.2% Fri 9 Feb Wholesale Sales Dec 1.5% 0.6%

Monday, February 5, 2018

What's going on and why does it matter? Mortgage bonds opened slightly higher this morning as the bond market tries to catch its breath after last week's wild ride. There is a sell-off taking place in the global bond market due to the prospect of rising inflation, strong economic reports, increased supply of bonds due to growing government deficits, and reduced demand for bonds due to the ongoing reduction of the massive bond-buying program of the Federal Reserve and potentially other Central Banks.  All this is causing global bond yields to rise from their multi-year lows, and it means that mortgage pricing could continue to get worse.  The economic calendar is relatively tame this week, although Congress is at again with another budget deadline this Thursday. It will be interesting to see if the correction in the bond market continues, or if bonds can stage some sort of rebound this week.  The Fed is scheduled to purchase up to $840 million of GNMA mortgage bonds today. What should you do about it? Trying to time the market in times like this is a bit like trying to catch a falling knife. So, it may be best just to play it safe and lock your rate. ..... ..... Economic reports that may impact mortgage rates this week: Date Report Period Prior Est. Actual Mon 5 Feb ISM Non-Mfg PMI Jan 55.9 56.5   Tue 6 Feb JOLTS Job Openings Dec 5.879M 5.90M   Thu 8 Feb Initial Jobless Claims Week of Jan 29 230k 238k   Fri 9 Feb Wholesale Inventories Dec 0.2% 0.2%   Fri 9 Feb Wholesale Sales Dec 1.5% 0.6%