Friday’s bond market has opened in negative territory again as the flight-to-safety in bonds continues to reverse course. The stock markets are contributing to this morning’s losses with the Dow up 182 points and the Nasdaq up 53 points. The bond market is currently down 20/32 (2.39%), which should push this morning’s mortgage rates higher by approximately .625 – .750 of a discount point from yesterday’s morning pricing.
The bond market extended its morning losses during afternoon trading yesterday, partly as a result of a weak 30-year Bond auction. News from Greece that hints at a possible resolution in the near future and a rebound in the China financial markets all contributed to the spike in bond yields since yesterday morning. Many lenders revised rates higher Thursday afternoon, so just how much of an increase you see in this morning’s pricing depends on the size of the adjustment your lender made late yesterday. Overall, today’s fixed rates are likely over .125 of a percent in rate higher than Thursday morning.
There is no relevant economic data being posed today, but Fed Chair Janet Yellen is speaking in Cleveland at noon ET. Market participants always listen when she speaks, so any substantive comments about Greece and its potential impact on our economy or a Fed rate increase will probably cause a reaction in the markets and possibly mortgage pricing during early afternoon trading today.
Next week has a fair amount of relevant economic data set to be posted, including two important inflation readings and a key measurement of consumer spending. In addition to the data, next week brings us two-days of semi-annual congressional testimony from the Fed Chair. There is nothing of importance scheduled for Monday, but every other day has something that is very important to bonds and mortgage rates. Look for details on all of next week’s activities in Sunday evening’s weekly preview.