Indexes Affecting Rate Lock

Low

Negative

Geopolitical/Financial Issues

There is no relevant economic data set for release today. News from the weekend that Ukraine resumed attacks on refineries and energy sites in Russia and more shipping attacks in the Strait of Hormuz are likely the reason for this morning’s soft open in bonds. These incidents play into inflation/gas cost fears that make bonds less appealing to investors. They aren’t major news events, but with nothing else on the calendar to influence trading today traders are responding more to the geopolitical news than they may have if there were other distractions.

Medium

Unknown

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

The remainder of this light week has only three monthly reports set to be posted and none of them are considered to be highly influential. In addition to the data, there is also a Treasury auction midweek that may come into play during afternoon trading. We can also expect new geopolitical headlines to contribute to movement in bond yields and mortgage pricing.

Low

Unknown

Housing Starts (New Home Construction)

The week's thin calendar begins early tomorrow morning with the release of September's Housing Starts report at 8:30 AM ET. It gives us a sign of housing sector strength and future mortgage credit demand by tracking new home groundbreakings in multi-family and single-family homes. However, it is considered to be of low importance to the financial and mortgage markets and rarely causes a noticeable move in rates. Analysts are expecting it to show an increase in new home starts between August and September. Due to the lack of market importance, we need to see a significant surprise in this data for it to have an impact on tomorrow’s mortgage pricing.

Medium

Unknown

Corporate Earnings

We are in corporate earnings season where publicly traded companies announce their earnings and forward-guidance. Some come during early morning hours while many are released after market hours. These events are much more about the stock markets than bonds or mortgage rates. That said, they can lead to a shift in funds that indirectly lead to changes. For example, strong earnings results usually cause a rally in stocks and make bonds less appealing to some investors. However, disappointing results may lead to stock selling, pushing funds into bonds as a safe haven. As the latter happens, bond prices rise to push yields and mortgage pricing lower. In short, bad news for stocks can indirectly lead to bond gains and slightly lower mortgage rates.

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Unknown

none

Overall, no day stands out as a clear candidate for most important for rates this week and the same can be said about predicting the calmest day. There just aren’t enough relevant scheduled events this week to do so. Also worth noting is that the Fed is in their mandatory pre-FOMC quiet period ahead of next week’s meeting. This means we won’t hear any individual Fed-member opinions about the economy or potential monetary policy topics, removing a factor that sometimes drives bond trading during very light weeks. Still, as we have seen several times over the past few weeks, unexpected news can come from anywhere and at any time. Therefore, it would be prudent to keep a close eye on the markets if still floating an interest rate and closing in the near future as we still may get intraday movement in rates this week.

Rate Lock Advisory

Mortgage Rate Trend

Indexes Affecting Rate Lock

Geopolitical/Financial Issues

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

Housing Starts (New Home Construction)

Corporate Earnings

none

Float / Lock Recommendation