Tuesday, March 11th
Tuesday’s bond market has opened in negative territory despite more stock selling. The major stock indexes are showing much more modest losses this morning than yesterday, but are still in negative ground. The Dow is down 375 points while the Nasdaq has lost 43 points. The bond market is currently down 2/32 (4.22%), which should cause an increase of approximately .125 of a discount point in this morning’s mortgage rates.
2/32
Bonds
30 yr - 4.22%
375
Dow
41,536
43
NASDAQ
17,425
Trailing 90 Days - National Average
High
Neutral
There are headlines hitting the wires that President Trump is considering raising the previously announced tariffs on Canadian steel and aluminum. Market participants are more focused on tomorrow and Thursday’s economic releases than tariffs at this moment. This could change if there is a noticeable move in stocks later today or if there are further headlines on the topic.
High
Unknown
Tomorrow brings us a highly influential inflation reading in the morning and also has an afternoon event that may affect rates later in the day. February’s Consumer Price Index (CPI) will be released at 8:30 AM ET. This index measures inflationary pressures at the very important consumer level of the economy. The overall CPI is expected to show a 0.3% increase, as is the more important core data that excludes more volatile food and energy prices. Both are expected to slow 0.1% from January’s pace on an annual basis. Good news for bonds and mortgage rates would be smaller increases in the monthly and year-over-year readings. Stronger than anticipated readings will likely cause bond selling and fuel debate about the Fed’s plans with monetary policy, leading to higher mortgage rates tomorrow.
Medium
Unknown
Also tomorrow is the 10-year Treasury Note auction that may have an impact on afternoon mortgage pricing. Results will be announced at 1:00 PM ET. If investor demand was high for the securities, we may see bonds rally during afternoon trading as it would hint that investors still have an appetite for longer-term debt. However, weak demand in the sale could lead to selling and an increase in mortgage rates before closing tomorrow.
If I were considering 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... Float 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.