Bond Market Update

Bond Market Update

Market Update

Monday, January 27, 2020

What's going on and why does it matter?
Mortgage bonds and interest rates are at their best level in nearly four months as financial markets remain jittery about the escalation in the number of coronavirus cases and deaths, primarily in China. Many economists are estimating that if the outbreak continues to spread it could shave 1.2% off China’s expected growth this year. In 2019, China's economy grew at the slowest pace in 29 years. In other news, the economic calendar here in the US is quite full this week, with the highlight being the Fed's interest rate decision and monetary policy statement scheduled for release on Wednesday. No change to short-term interest rates or monetary policy is expected. There are also several high-tiered economic reports scheduled for release throughout the week.

What should you do about it?
It may be a good idea to lock your rate while mortgage bonds remain near the upper end of their recent trading range.

Economic Calendar

Economic reports that may impact mortgage rates this week:

Date Report Period Prior Est. Actual
Mon 27 Jan New Home Sales Dec 719k 730k 694k
Tue 28 Jan Durable Goods Dec -2.1% 0.5%  
Tue 28 Jan Consumer Confidence Jan 126.5 128.0  
Wed 29 Jan Pending Home Sales Dec 1.2% 0.5%  
Wed 29 Jan Fed Funds Target Rate - 1.75% 1.75%  
Thu 30 Jan GDP advance Q4 2019 2.1% 2.1%  
Thu 30 Jan Core PCE Prices advance Q4 2019 2.1% 1.7%  
Thu 30 Jan Initial Jobless Claims Week of Jan 20 211k 215k  
Fri 31 Jan Personal Income Dec 0.5% 0.3%  
Fri 31 Jan Core PCE Price Index Dec 0.1% 0.1%  
Fri 31 Jan Chicago PMI Jan 48.9 48.5  
Fri 31 Jan U of Mich Consumer Sent. Jan 99.1 99.1