Daily Rate Lock Advisory

Indexes Affecting Rate Lock

Medium

Positive

ISM Service Index

The Institute for Supply Management (ISM) gave us their September non-manufacturing index late this morning, also known as the service index. They announced a reading of 54.9 that was a decline from August’s 55.4 and a tad lower than the 55.0 that was expected. The lower reading means surveyed service executives felt business conditions were slightly better in August than last month. Since this is a sign of slower economic activity we can label the report favorable for bonds and mortgage rates. However, the report doesn’t carry enough importance to offset the general negative tone in bonds right now. That has prevented the news from impacting mortgage rates.

Medium

Unknown

FOMC Meeting Minutes

Over the remaining four days this week, we will get just one more monthly economic report along with two Treasury auctions and the release of the minutes from last month's FOMC meeting. With such a light calendar, don’t be surprised to see outside factors have a stronger influence on bond market and mortgage rates movement this week. There isn’t much to be optimistic about in this week’s calendar, but we can certainly hope to see calmer days, particularly afternoon trading that will make it harder for rates to move any higher.

Medium

Unknown

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

There isn’t anything scheduled for tomorrow that has the potential to affect rates. The next relevant event comes Wednesday afternoon when results of the day's 10-year Treasury Note auction are announced at 1:00 PM ET and the FOMC minutes are released at 2:00 PM ET. The auction results will give us an indication for investor demand for long-term securities. Mortgage rates are based on long-term debt, so this sale (and Thursday’s 30-year Bond auction) have the most influence on rates of all the monthly auctions. The FOMC minutes will give us better insight into the Fed’s discussion about key rates last month and their decision to raise them a quarter-point.

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Unknown

none

Overall, no day stands out as a good candidate for most important day for rates. The same can be said about a particularly calm day. The FOMC minutes aren't likely to yield any big surprises and the remaining monthly economic release is considered to be only moderately important to the markets. It may end up being Wednesday afternoon's auction results announcement that draws the strongest reaction in the bond market and mortgage pricing. While it appears to be a light week in terms of expected movement in mortgage rates, it could be something unplanned that may cause a big move in rates. Therefore, it would still be prudent to keep an eye on the markets if still floating an interest rate and closing in the near future even though we are expecting to see far less volatility than we did last week.

Rate Lock Advisory

Mortgage Rate Trend

Indexes Affecting Rate Lock

ISM Service Index

FOMC Meeting Minutes

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

none

Float / Lock Recommendation