Bond Market Update

Bond Market Update

Bond Market Update

Market Update

Monday, September 21, 2020

What's going on and why does it matter?
Mortgage bonds opened higher this morning and stocks are set to open the week lower. Financial markets are concerned about a resurgence in COVID cases, particularly in Europe, as well as allegations that surfaced over the weekend regarding the movement of illicit funds in the banking sector. It will also be interesting to see how the market reacts to the passing of Justice Ginsberg and the increased conservative majority in the Supreme Court near-term ahead of the election. 

As for economic news, the economic calendar is relatively quiet this week, although several Fed policymakers are scheduled to give speeches. Fed Chair Powell is scheduled to have three appearances before Congress this week related to the CARES Act and the coronavirus response. The bond market will also be absorbing a record supply of US Treasuries scheduled to hit the market this week. The Fed is scheduled to purchase up to $5.5 billion of mortgage bonds today.

What should you do about it?
It may be a good idea to lock your rate until mortgage bonds find the strength to break above their 10-day moving average.

Economic Calendar

Economic reports that may impact mortgage rates this week:
Date Report Period Prior Est. Actual
Tue 22 Sep Existing Home Sales Aug 5.86M 6.00M  
Thu 24 Sep Initial Jobless Claims Week of Sep 14 860k 845k  
Thu 24 Sep New Home Sales Aug 901k 900k  
Fri 25 Sep Durable Goods Orders Aug 11.4% 1.5%