Wednesday, April 2nd
Wednesday’s bond market has opened in positive territory as traders await this afternoon’s events. Stocks are showing minor gains of 96 points in the Dow and 25 points in the Nasdaq. The bond market is currently up 4/32 (4.14%), which should improve this morning’s mortgage rates slightly if compared to Tuesday’s early pricing.
4/32
Bonds
30 yr - 4.14%
96
Dow
41,893
25
NASDAQ
17,424
Trailing 90 Days - National Average
Medium
Negative
March’s ADP private-sector Employment report started today’s activities at 8:15 AM ET. The payroll processor announced 155,000 new jobs were added to the economy, exceeding forecasts of 120,000. There was also an upward revision of 7,000 to February’s previously announced number, indicating the private sector labor market may be stronger than thought. As a sign of employment strength, this report has to be labeled bad news for bonds and mortgage pricing. However, the markets are focused more on this afternoon’s events that may have a long-term impact on the economy.
Medium
Neutral
Today’s second economic report was February's Factory Orders data at 10:00 AM ET. It showed a 0.6% rise in new orders at U.S. factories. This was a tad stronger than forecasts, but a good portion of these orders were already released in last week’s Durable Goods Orders report to minimize the influence of today’s version. Since it was a minor variance from expectations and came in a moderately relevant report, the news has not had much of an impact on this morning’s mortgage pricing.
High
Unknown
There are also two afternoon events that we will be watching even though they will be after the bond market has closed. Today is President Trump’s Liberation Day of tariff announcements. He is expected to announce a wide range of tariffs on many goods imported into the U.S. at 4:00 PM ET. Generally speaking, in the short term, stiff tariffs should hurt stock prices and cause a bond rally that leads to an improvement in mortgage pricing. Over the mid and longer-term periods, higher tariffs are going to be an inflation concern for the bond market that could be troublesome for mortgage rates. We won’t see a reflection of this afternoon’s news until tomorrow morning’s mortgage rates.
Medium
Unknown
Finally, there is a Fed speech at 4:30 PM ET today with the topic labeled “Inflation Expectations and Monetary Policymaking”. These are two hot topics for the financial and mortgage markets, meaning it may draw more attention from market participants than many of the other speeches do. Again, it isn’t something that will affect rates until tomorrow morning.
Medium
Unknown
Tomorrow has last week’s unemployment figures set for release along with March's non-manufacturing index from the Institute for Supply Management (ISM). This is the sister release to yesterday's manufacturing index, tracking executive sentiment about business conditions in the services sector instead of manufacturing. Predictions have the index at 53.2, down slightly from February’s 53.5. A larger decline would signal fewer surveyed executives felt business improved than those who did the previous month. An increase would be bad news for bonds and mortgage rates.
Medium
Unknown
The weekly unemployment update is expected to show 226,000 new claims for jobless benefits were made. This would be a small increase from the previous week’s 224,000. Rising claims are a sign the employment sector is weakening. Therefore, the larger the number the better the news it is for mortgage pricing.
High
Unknown
We have more relevant Fed speeches tomorrow also. There is one set for 12:30 PM ET in Atlanta and another at 2:30 PM in Pittsburgh that have highly important topics.
If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.