Daily Rate Lock Advisory

Indexes Affecting Rate Lock

High

Negative

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

Yesterday’s 20-year Treasury Bond went poorly, giving us pretty much the worst-case scenario for rates. The benchmarks indicated a weak interest in the securities, giving a clear sign that investors are quite concerned about what the future holds in terms of inflation that erodes the value of a bond’s future fixed interest payments and the amount of supply of new debt that will be needed to fund the government. As we would have expected with little else to drive trading yesterday, the bond market went into selling mode after results were announced at 1:00 PM ET. The results also caused big losses in the major stock indexes yesterday as high bond yields cause issues for publicly traded companies in regards to borrowing costs and earnings.

Medium

Neutral

Weekly Unemployment Claims (every Thursday)

Last week’s unemployment figures were posted at 8:30 AM ET this morning, revealing 227,000 new claims for jobless benefits were filed. This was a decline from the previous week’s revised 230,000 initial filings, hinting at strength in the employment sector. While the data is technically bad news for bonds, it came in a weekly update and varied modestly from forecasts. Accordingly, even though we have to label it unfavorable, it actually hasn’t had much of an impact on this morning’s rates.

Medium

Positive

Existing Home Sales from National Assoc of Realtors

Also posted this morning was April’s Existing Home Sales report. The National Association of Realtors announced a 0.5% decline in home resales last month when they were expected to say they rose slightly. This is likely a result of stubbornly higher mortgage rates and falling consumer confidence in their own financial situations. Weaker housing data makes broader economic growth harder, allowing us to label the report good news for bonds and mortgage pricing.

Low

Unknown

New Home Sales

This week’s final piece of economic data is set for release at 10:00 AM ET tomorrow. This is when April’s New Homes Sales figures will be posted, giving us another reading of the housing sector. However, this version covers only the small portion of sales that report didn’t. Accordingly, it carries a low level of influence on the financial and mortgage rates.

Low

Unknown

Holiday Schedule

Also worth noting about tomorrow is the early close for the bond market ahead of Monday's Memorial Day holiday. The bond market will close at 2:00 PM ET tomorrow while stocks trade for a full day. All markets will be closed Monday for the holiday. We sometimes see a bit of volatility in bonds in these situations as traders look to protect themselves over the three-plus day weekend.

Rate Lock Advisory