Aaron Abed

Monday's bond market has opened down slightly following early stock gains. The stock markets have started the week in positive territory with the Dow up 54 points and the Nasdaq up 3 points. The bond market is currently down 2/32, which will likely keep this morning's mortgage rates at Friday's levels.

This week brings us the release of only three relevant economic reports with only one of them being considered highly important. It is a holiday shortened week with the bond market closing at 2:00 PM today and remaining closed tomorrow in observance of the Veterans Day holiday. I am not expecting this early close to impact bond trading enough to affect mortgage pricing.

The first data of the week is September's Goods and Services Trade Balance report Thursday morning. It helps us measure the size of the U.S. trade deficit, but usually is not a major influence on bond trading or mortgage pricing. It does affect the value of the U.S. dollar, which m akes U.S. securities more attractive to international investors when the dollar is strong. This is because the securities' proceeds are worth more when sold and converted to the investor's domestic currency. However, its results will not likely directly lead to changes in mortgage rates.

Overall, look for a fairly quiet week in the mortgage market compared to previous weeks unless something totally unexpected transpires. As long as the stock markets remain fairly calm, I am expecting to see mortgage rates follow suit. The two Treasury auctions that are of the most interest are Wednesday's and Thursday's since they can impact mortgage rates the most. With only one important report being posted and that doesn't come until Friday morning, I am expecting the bond market and mortgage rates to step back and take a breath per se, most likely until Friday's data.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking plac e 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.

Friday's bond market has opened in negative territory despite the release of a much weaker than expected Employment report. The stock markets are showing gains after a couple of sizable down days this week. The Dow is currently up 84 points while the Nasdaq has gained 17 points. The bond market is currently down 19/32, but we should still see an improvement in this morning's mortgage rates of approximately .250 of a discount due to a strong rally in bonds late yesterday. This morning's losses are taking back some of yesterday's late gains, but mortgage rates are still lower than yesterday's morning rates.

The Labor Department gave us some surprising readings this morning, saying that the U.S. unemployment rate jumped from 6.1% in September to 6.5% in October. They were expected to show a 6.3% unemployment rate. This was the highest rate of unemployment since March 1994.

The number of payrolls added or lost during the month also opened some eye s. The economy lost 240,000 jobs last month, which was worse than the 200,000 that was forecasted. But equally as bad was a large revision to September's payrolls. What was previously announced as a loss of 159,000 jobs in September is now being estimated at 284,000. This was the 10th consecutive monthly drop in payrolls and brings the yearly total to 1.2 million jobs lost and the first time we have seen 1 million jobs lost since 2001.

Today's report gives us little to be optimistic about in regards to the employment sector. It is becoming more and more clear to many analysts that the economy is actually in a recession despite the lack of an official announcement or other benchmark indicators. What is equally concerning is that many think the problems are going to get worse before better. This could be good news for bonds and mortgage shoppers, but the crazy volatility we have seen in the markets recently makes it very difficult to follow historical patter ns or make realistic predictions. There is little doubt that we will see more volatility in the coming weeks.

Next week is light in terms of the number of relevant economic reports scheduled for release. We will get some important data late next week, but the first part of the week there is nothing scheduled for release to be concerned with. This make sit very likely that the stock markets will be the biggest influence on bonds and mortgage rates the first couple of days of the week. But look for more details on next week's event sin Sunday's weekly preview.

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 an d cannot be guaranteed to be in the best interest of all/any other borrowers.

Wednesday's bond market has opened in positive territory, continuing yesterday's late rally. The stock markets are well into negative ground this morning with the Dow down 171 points and the Nasdaq down 37 points. The bond market is currently up 3/32, but due significant strength in bonds late yesterday, we will likely see an improvement of approximately .500 - .625 in today's mortgage rates.

There is no important data scheduled for release today. Tomorrow's sole important report is the 3rd Quarter Productivity reading. The productivity index is expected to show a level of worker productivity during the third quarter much lower than last quarter's final reading of 4.3%. Analysts have forecasted a 1.0 rise in worker output. A larger increase would be good news for the bond market because high levels of productivity helps the economy to expand without inflationary pressures being a concern.

We also will get weekly unemployment figures from the Lab or Department early tomorrow morning. It is expected to show that new claims for benefits fell slightly to 476,000 last week. While this data usually does not have much of an impact on the markets because it tracks only a week's worth of claims, tomorrow's release may be a little more influential than usual. This is because the release will cover the last full week of October and with Friday's monthly report coming out for the entire month, traders will be looking for any significant change in claims that may alter their estimates for the monthly report.

Friday's Employment report is expected to show that the economy lost 200,000 jobs, that unemployment rate moved from 6.1% to 6.3% and that average earnings rose 0.2% during the month. The large drop in payrolls and 0.2% jump in the unemployment rate are numbers of concern to the markets, therefore, I don't believe that we will need to see weaker than expected results to see bonds improve and mortgage rates move lower. However, stronger than forecasted readings could give back this morning's improvements to rates since the markets are expecting weak numbers.

I am expecting to see more volatility in bonds and mortgage rates in the days ahead. Accordingly, it may be a good time to lock if closing in the immediate future. Regardless though, I strongly recommend maintaining contact with your mortgage professional over the next week or so.

Tuesday's bond market has opened up slightly despite sizable stock gains during early trading. The stock markets are strong this morning with the Dow up 262 points and the Nasdaq up 42 points. The bond market is currently up 2/32, which will likely improve this morning's mortgage rates by approximately .125 of a discount point.

Today's only relevant data came from the Commerce Department who posted September's Factory Orders report. It showed a decline of 2.5% that was an improvement from August's 4/3% drop, but was also much weaker than the 0.8% decline that was expected. This means that new orders at U.S. factories fell much more than thought and indicates a rapidly slowing manufacturing sector. This is good news for bonds and mortgage rates.

There is no important data scheduled for release tomorrow. Thursday's sole important report is the 3rd Quarter Productivity reading. The productivity index is expected to show a level of worker productivi ty during the third quarter much lower than last quarter's final reading of 4.3%. Analysts have forecasted a 1.0 rise in worker output. A larger increase would be good news for the bond market because high levels of productivity helps the economy to expand without inflationary pressures being a concern.

We also will get weekly unemployment figures from the Labor Department early tomorrow morning. It is expected to show that new claims for benefits fell slightly to 476,000 last week. While this data usually does not have much of an impact on the markets because it tracks only a week's worth of claims, tomorrow's release may be a little more influential than usual. This is because the release will cover the last full week of October and with Friday's monthly report coming out for the entire month, traders will be looking for any significant change in claims that may alter their estimates for the monthly report.

If I were considering financing/refinanci ng a home, I would.... Float if my closing was taking place within 7 days... Float 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.

Monday's bond market has opened in positive territory following weaker than expected economic news. The stock markets are posting gains with the Dow up 42 points and the Nasdaq up 15 points. The bond market is currently up 3/32, but we may still see slight increase in this morning's mortgage rates due to weakness late Friday.

The week's first report came late this morning from the Institute for Supply Management (ISM). They posted their Manufacturing Index for October, showing a reading of 38.9 that was well below forecasts and a 26-year low. The index measures manufacturer sentiment and this morning's release indicated sentiment is softening. This is good news for bonds and mortgage rates because slowing manufacturing activity usually means a weakening economy and eases inflation concerns.

Tomorrow's only relevant news is September's Factory Orders report. This report is similar to last week's Durable Goods Orders release except it includes o rders for both durable and non-durable goods. It is expected to show 0.8% decline in orders from August's level. A larger decline would be good news for the bond market and mortgage rates while a smaller than expected drop is bad news.

There is no important data scheduled for release Wednesday. Thursday's report is the 3rd Quarter Productivity reading. The productivity index is expected to show a level of worker productivity during the third quarter much lower than last quarter's final reading of 4.3%. Analysts have forecasted a 1.0 rise in worker output. A larger increase would be good news for the bond market because high levels of productivity helps the economy to expand without inflationary pressures being a concern.

The last report of the week is the most important. Friday brings us the release of one of the most important monthly reports- the Employment report. The Labor Department will post October's employment stats early Friday morning. The report is comprised of many statistics and readings, but the most important ones are the unemployment rate, the number of new jobs added or lost during the month and average hourly earnings. Current forecasts call for a 0.2% rise in unemployment to bring the national rate to 6.3%, a drop in payrolls of approximately 200,000 and a 0.2% increase in average earnings. Weaker than expected readings should rally bonds and lead to improvements in mortgage rates, especially if the stock markets react poorly to the news.

Overall, I am expecting to see a moderately active week in mortgage pricing. The key to the week will be Friday's employment numbers, but any significant swings in the stock markets may also influence whether mortgage rates close the week higher or lower than this morning's levels.

If I were considering financing/refinancing a home, I would.... Float if my closing was taking place within 7 days... Float 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.