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Bond Market Update

Market Update

Monday, October 23, 2017

What's going on and why does it matter?

Mortgage bonds opened below their 200-day moving average today after closing below that critical level on Friday. The bond market sell-off was triggered after the Senate voted last week to pass a budget resolution bill, which paves the way for massive tax reform. The rally in stock prices and the decline in bond prices seem poised to continue this week in light of favorable corporate earnings in Europe, and a strong win for Prime Minister Abe’s party in Japan’s snap election, which paves the way for continued accommodative monetary policy. Even so, the escalation in the Spain/Catalonia crisis may put a damper on market sentiment this week.  The economic calendar is empty today, but it picks up later in the week.  The Fed is scheduled to purchase up to $1.085 billion of GNMA mortgage bonds today.

What should you do about it?
Lock your rate if mortgage bonds continue to trade below their critical 200-day moving average.


Economic Calendar

Economic reports that may impact mortgage rates this week:

Date Report Period Prior Est. Actual
Tue
24 Oct
Markit Mfg
PMI
Oct 53.1 53.6  
Wed
25 Oct
Durable
Goods
Sep 2.0% 1.0%  
Wed
25 Oct
New Home
Sales
Sep 560k 555k  
Thu
26 Oct
Initial Jobless
Claims
Week of
Oct 16
222k 235k  
Thu
26 Oct
Pending
Home Sales
Sep -2.6% 0.2%  
Fri
27 Oct
GDP
advance
Q3
2017
3.1% 2.6%  
Fri
27 Oct
Core PCE
Prices
advance
Q3
2017
0.9% 1.2%  
Fri
27 Oct
U of Mich
Consumer
Sentiment
Oct
101.1 100.8  

Matt Chao

Matt Chao
NMLS Number: 1428557
VIP Independend Mortgage, Inc.
Corporate NMLS Number: 145502
matt.chao@vipmtginc.com
http://mattchao.vipmtginc.com
(858) 216-2368
3919 30th St, Suite 7
San Diego, California 92104

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