|What’s going on and why does it matter?|
Mortgage bonds opened sharply lower this morning and it will be interesting to see if they can remain in positive territory above their 30-day moving average. There were some positive economic reports in Europe and China over the weekend, causing stocks to rally at the expense of bonds. Investors are also watching US-China trade talks where a phase one agreement appears pushed back to the end of the year or into next, although President Trump is expected to pause tariffs that were scheduled to kick-in mid-month. In the meantime, the President reinstated tariffs on steel and aluminum products effective immediately from Brazil and Argentina due to a “massive devaluation of their currencies.” The Fed is scheduled to purchase up to $1.502 billion of conventional mortgage bonds today, which may buoy bond prices. The economic calendar is quite full this week, and it includes the always-important jobs report scheduled to be released on Friday.
What should you do about it?
Watch and see if mortgage bonds can bounce higher off their 30-day moving average, but be prepared to lock your rate if mortgage bonds break below that level……
Economic reports that may impact mortgage rates this week:
|Mon 2 Dec||Construction Spending||Oct||0.5%||0.4%|
|Mon 2 Dec||ISM Mfg PMI||Nov||48.3||49.2|
|Wed 4 Dec||ADP National Employment||Nov||125k||140k|
|Wed 4 Dec||ISM Non-Mfg PMI||Nov||54.7||54.5|
|Thu 5 Dec||Initial Jobless Claims||Week of Nov 25||213k||215k|
|Thu 5 Dec||Factory Orders||Oct||-0.6%||0.3%|
|Fri 6 Dec||Non-Farm Payrolls||Nov||128k||180k|
|Fri 6 Dec||Unemployment Rate||Nov||3.6%||3.6%|
|Fri 6 Dec||Average Earnings||Nov||0.2%||0.3%|
|Fri 6 Dec||U of Mich Consumer Sent.||Dec||96.8||97.0|