Daily Rate Lock Advisory

Indexes Affecting Rate Lock

Low

Unknown

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

Yesterday’s 5-year Treasury Note auction is being labeled as a little on the weak side. The benchmarks in the results announcement at 1:00 PM ET showed investor demand for the securities was weaker than other recent sales. Bonds did lose some ground about the time results were made available, but it wasn’t enough of a move to cause widespread rate revisions from lenders. Had this been a long-term security auction such as the 10-year or 30-year sales, we likely would have seen an upward revision in rates. However, yesterday’s sale results leave us little to be optimistic about regarding today’s 7-year Note auction. Good news would be the 1:00 PM ET results showing a much stronger demand than yesterday’s sale drew.

Medium

Negative

Weekly Unemployment Claims (every Thursday)

There was no relevant monthly economic data released this morning, but we did get last week’s unemployment figures at 8:30 AM ET. They revealed 203,000 new claims for jobless benefits were made, falling short of the 208,000 that was expected and declining from the previous week’s revised 207,000. Declining claims for unemployment benefits is considered to be a sign of strength in the employment sector, causing us to label the report bad news for mortgage rates.

Medium

Unknown

Univ of Mich Consumer Sentiment (Rev)

Tomorrow morning brings us two late morning events that may have an impact on mortgage rates. First will be the release of the University of Michigan's revised August Index of Consumer Sentiment at 10:00 AM ET. This sentiment index helps us track consumer willingness to spend. It is expected to have held at August's preliminary reading of 51.0 from two weeks ago. If it revises lower, it would mean consumers were less confident about their personal financial situations than previously thought. This would be good news for the bond market and mortgage rates because waning confidence usually means that consumers are less likely to make large purchases in the near future. The lower the reading tomorrow, the better the news for mortgage shoppers.

High

Unknown

Fed Talk

Next up is Fed Chairman Warsh’s speech at the Fed's annual Jackson Hole conference in Wyoming, also at 10:00 AM ET. This event is often considered the Fed Chairman's annual outline for monetary policy and always draws the attention of the markets. Considering the difficult position the Fed may be in regarding what to do at upcoming FOMC meetings (possibly raising key short-term rates) bond traders will be closely following his words for an indication of how the data that came after the FOMC meeting may have altered the Fed's thought process and game plan to bring inflation down. Any surprises in his speech will make it the driving force of a change in rates tomorrow and likely not the Michigan index.

Rate Lock Advisory

Mortgage Rate Trend

Indexes Affecting Rate Lock

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

Weekly Unemployment Claims (every Thursday)

Univ of Mich Consumer Sentiment (Rev)

Fed Talk

Float / Lock Recommendation