Rate Lock Advisory

Tuesday, September 9th

Tuesday’s bond market has opened in negative territory despite news that the employment sector was much weaker than previously thought most of last year and the first quarter of this year. Stocks are fairly calm with the Dow down 7 points and the Nasdaq up 22 points. The bond market is currently down 7/32 (4.06%), which should cause an increase of approximately .125 of a discount point in this morning’s mortgage rates.

7/32


Bonds


30 yr - 4.06%

11


Dow


45,503

22


NASDAQ


21,821

Mortgage Rate Trend

Trailing 90 Days - National Average

  • 30 Year Fixed
  • 15 Year Fixed
  • 5/1 ARM

Indexes Affecting Rate Lock

Low


Positive


Employment Situation

Today’s only semi-relevant economic news came from the Bureau of Labor Statistics, who announced their annual benchmark revision for payroll numbers. They said that there were actually 911,000 fewer jobs added to the economy than previously estimated between March of this year and the same month last year. This data is quite aged now and hasn’t had much of an impact on the financial markets. That said, it should probably fuel political talk about the economy before President Trump took office and more importantly, what the Fed does at next week’s FOMC meeting. Unless there is a significant spike in this week’s inflation readings, they are likely to cut key short-term interest rates by at least a quarter-point.

High


Unknown


Producer Price Index (PPI)

We will get one of this week’s two highly important inflation readings tomorrow morning when August's Producer Price Index (PPI) is released at 8:30 AM ET. The PPI measures inflationary pressures at the wholesale level of the economy and can have a significant impact on the financial and mortgage markets. There are two readings in the report- the overall and core data. Core figures will draw more attention as they exclude more volatile food and energy prices. Current forecasts show a 0.3% rise in both the monthly overall and core readings. The overall PPI is predicted to have held at July’s annual rate of 3.3%, but the year-over-year core rate is expected to have slipped from 3.7% to 3.5% last month. The weaker the readings, the better the news for bonds and mortgage rates.

Medium


Unknown


Treasury Auctions (5,7,10,20,30 year)

Tomorrow also has the first of this week's Treasury auctions that may influence rates. 10-year Treasury Notes will be sold tomorrow, followed by 30-year Bonds Thursday. If 1:00 PM ET results announcement shows investor demand was strong, particularly from international investors, we should see mortgage rates improve during afternoon trading tomorrow. However, if the benchmarks point to weak interest in the securities, we may see afternoon pressure in bonds that lead to a slight upward revision to mortgage rates before the end of the day.


Target Cost Realty, LLC

2634 South Carrier Parkway Suite 107
Grand Prairie, Texas 75052