Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!
Tuesday’s bond market has opened in positive territory following early stock weakness and favorable result sin this morning’s economic news. The stock markets are posting noticeable losses with the Dow down 97 points and the Nasdaq down 26 points. The bond market is currently up 14/32, which with yesterday’s late strength should improve this morning’s mortgage rates by approximately .375 - .500 of a discount point over yesterday’s morning rates.
Today’s relevant economic data was Employee Productivity and Costs data for the second quarter. It showed a sharp increase in productivity compared to the 1st quarter’s final reading. The 6.4% jump was higher than analysts had expected and is considered good news for bonds and mortgage rates. This data didn’t push stocks lower, but the drop in stocks has also helped boost bond prices this morning.
June’s Trade Balance report will be released early tomorrow morning. It gives us the size of the U.S. trade deficit but is the week’s least important report and likely will have little impact on the bond market and mortgage rates. Analysts are expecting to see a $28.6 billion deficit, but it will take a wide variance to directly influence mortgage pricing.
The FOMC meeting that began today will adjourn at 2:15 PM ET tomorrow. It is expected to yield no change to key interest rates. Usually, the post-meeting comments seem to have more of an influence on the markets than the rate adjustments themselves, or a lack of one in many cases. Look for the statement to lead to volatility during afternoon trading if it hints at what the Fed’s next move may be and when it will come. If the statement does not give us new information, mortgage rates will...
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©Mortgage Commentary 2009
* Please note that this information reflects just one opinion on the current market. If you are considering a purchase or refinance and have a mortgage rate and monthly payment you are comfortable with you may want to consider locking that mortgage rate. It is very difficult to predict the market in these very volatile times. Most lenders have a mortgage rate renegotiation policy. Contact me for details. Jeff@StarMortgage.com
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