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Bond Market Update

Market Update

Monday, May 22, 2017

What's going on and why does it matter?

Mortgage bonds opened this morning near their best levels of the year, after rallying last week in response to the drama unfolding in Washington DC.  Mortgage bond prices seem to have established a new trading range between their 30-day and 200-day moving averages.  This is good news for mortgage pricing because bonds haven't approached their 200-day moving average since the US Presidential elections last November. It will be interesting to see if mortgage bonds can hold their ground in this week's trading. The stock market seems to be opening the week in better shape, and bond prices may start to back down from their lofty levels. The economic calendar is light today, although there are several Fed policymakers who are scheduled to give speeches. The Fed's mortgage bond purchases will be lighter this week vs. last week, and their mortgage buying activity today is limited to $525 million of 15-year conventional mortgages.

What should you do about it?
Lock your rate while bond prices are at the top of their recent trading range.


Economic Calendar

Economic reports that may impact mortgage rates this week:

Date Report Period Prior Estimate Actual
Tue
23 May
New Home
Sales
Apr 620,000 610,000  
Wed
24 May
Existing
Home Sales
Apr 5.71M 5.65M  
Thu
25 May
Initial Jobless
Claims
Week of
May 15
232,000 238,000  
Fri
26 May
Durable
Goods
Apr 0.7% -1.2%  
Fri
26 May
GDP
2nd estimate
Q1
2017
1.9% 0.9%  
Fri
26 May
Core PCE
Prices
Q1
2017
1.2% 2.0%  
Fri
26 May
U of Mich.
Consumer
Sentiment
May 97.0 97.5  

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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