Good Afternoon,
After five consistent days of investors buying into the bond market they woke up this morning, took a sip of coffee and said, “Sell, Sell!!!” This means that we will most likely see rates creep back up again today. The rate monster is back, but I don’t think for long!
Here’s the inside Dripp…
The unemployment figures were better than expected today, which was bad news for the bond market and interest rates if you are remortgaging. 448,000 new claims were expected, but the final figure was better at 432,000. Since less people claimed unemployment benefits, which negatively affects the bond market, rates slightly increased again today. This was only a weekly report, so it should not have such a tremendous influence, but since there was not much news scheduled, it definitely did not help our quest for lower rates. Read about unemployment.
On the opposite side of the coin, the Leading Economic Indicators (LEI) for July posted a MUCH greater drop than expected. Analysts expected a drop of economic activity for the next three to six months at a –0.2% rate. The actual number was –0.7%. This is good news for the bond market and interest rates because it eases inflationary levels. Read more about inflation.
Simply Put: Unemployment last week was down, which is bad news for rates, but the Leading Economic Indicators showed bigger economic slowdown for the next three to six months, which helps interest rates. Can you say, “Tug-a-war?” Right now the best thing to do if you are refinancing or pulling out equity from your home is to keep your eyes and ears open because there are some analysts who think rates will come down again and others are preaching the end of the world! We stick to the idea of intellectual hedge locking, which means to lock your rate and watch for any more drops throughout the process. The market is way too volatile to not protect yourself. Visit our home page later to read The Last Dripp for summary of today and what to expect tomorrow.
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