Daily Rate Lock Advisory

Indexes Affecting Rate Lock

High

Unknown

General Bond Trends

There were no major headlines yesterday that specifically caused the sell-off. Rhetoric between the U.S. and Iran was in the news and oil prices moved higher, but this scenario is fairly common these days. The most likely reason for yesterday’s weakness is just simply a negative attitude about holding long-term securities in the current environment where geopolitical tension remains high, as do inflation concerns. The real question is whether we will see another dark afternoon of selling or if bonds can find some support where yields are currently to bring buyers in. There is no particular reason to expect another afternoon of bond selling other than the past two days it happened. However, it would be prudent to keep an eye the markets if still floating an interest rate.

Medium

Neutral

Durable Goods Orders

August's Durable Goods Orders report was posted at 8:30 AM ET this morning, revealing new orders for big-ticket products were unchanged from July’s level. Analysts were expecting to see a decline of 0.4%, meaning the headline number was stronger than predicted. However, a secondary reading that excludes the more costly airplane and other transportation related orders fell short of forecasts. With the headline reading unfavorable and the secondary being good news for rates, along with the fact this data is known to be volatile from month to month, we are labeling the report neutral for mortgage rates.

Medium

Positive

Univ of Mich Consumer Sentiment (Rev)

Also coming this morning was the University of Michigan's revised September Index of Consumer Sentiment at 10:00 AM ET. They announced a reading of 48.1 that was lower than the initial reading of 51.7, but a bit higher than the 47.8 that was the consensus. Waning confidence is good news for bonds and mortgage rates because slower consumer spending makes broader economic growth less likely since that category makes up over two-thirds of the U.S. economy. While we can consider this report to be slightly favorable for bonds and mortgage rates, it has not had a clear impact on this morning’s pricing. Traders are more focused on global metrics today than this moderately relevant economic data.

High

Unknown

Employment Situation

Next week starts light with nothing of importance scheduled for release. That will leave weekend headlines from the Middle East as the likely force behind a change in rates Monday. Every other day of the week has at least one scheduled report that we will be watching, but the last three days each have multiple reports set for release and include highly influential data. Those particularly important reports include the Fed’s preferred inflation gauges, a closely-watched manufacturing report and the almighty monthly governmental Employment report. There is enough importance in next week’s data to recover some of this week’s heavy bond losses and rate increases. Although, that same influence can fuel more bond selling and another leg upward for rates if they reveal stronger inflation and/or economic growth. Look for details on all of next week’s activities in Sunday evening’s weekly preview.

Rate Lock Advisory

Mortgage Rate Trend

Indexes Affecting Rate Lock

General Bond Trends

Durable Goods Orders

Univ of Mich Consumer Sentiment (Rev)

Employment Situation

Float / Lock Recommendation