Good Morning,
The volatility we experienced yesterday in the mortgage market was fantastic! Bonds were purchased and mortgage rates kept dropping. Every time we see this type of bond market rally, it doesn’t last very long because investors begin to start selling for the profits they gained. We will be following this for you today. However, it is very difficult to predict what will happen next because of the unique nature of how the market has been “under” reacting to the negative headline news lately.
There are two pieces of economic data being released today that we need to follow.
1- The Labor Department will post the weekly unemployment figures. It is expected that there were 12,000 less claims last week. Now, if more people claimed unemployment than expected, we can see lower rates follow. The rise of unemployment can really help to lower mortgage interest rates. Read about why unemployment affects remortgaging here.
2- July’s Leading Economic Indictors (LEI) are due. We mentioned on a previous post that a higher than expected reading can hurt the bond market, thus stimulating an increase in mortgage interest rates. Read about the Leading Economic Indicators.
Because there is not much scheduled news this week, stocks and bonds are very vulnerable. We’ll post the results and what they mean for you later today. We will continue following the Fannie and Freddie debacle as well.
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