‚Äč Bond Market Update

Bond Market Update

Bond Market Update

Market Update

Wednesday, December 2, 2020

What's going on and why does it matter?
Mortgage bonds are hovering near their 10-day moving average after yesterday's steep decline. Meanwhile, stocks are hovering near all-time highs after yesterday's strong rally. The big news overnight was that the UK has become the first country to authorize the Pfizer-BioNTech vaccine for widespread use and that vaccinations would be starting there next week. The market is also hopeful that Congress may agree to some fiscal stimulus before year-end. On today's economic calendar, the ADP employment numbers for November came out much weaker than market expectations. The Fed is scheduled to purchase up to $8.7 billion of mortgage bonds today.

What should you do about it?
Watch for mortgage bond prices to remain in positive territory above their moving averages, but be prepared to lock your rate if mortgage bond prices fall below their 10-day moving average.

Economic Calendar

Economic reports that may impact mortgage rates this week:

Date Report Period Prior Est. Actual
Mon 30 Nov Chicago PMI Nov 61.1 59.0 58.2
Mon 30 Nov Pending Home Sales Change Oct -2.2% 1.0% -1.1%
Tue 1 Dec Construction Spending Oct 0.3% 0.8% 1.3%
Tue 1 Dec ISM Mfg. PMI Nov 59.3 57.9 57.5 
Wed 2 Dec ADP National Employment Nov 365k 410k 307k
Thu 3 Dec Initial Jobless Claims Week of Nov 23 778k 770k  
Thu 3 Dec ISM Non-Mfg. PMI Nov 56.6 56.0  
Fri 4 Dec Non-Farm Payrolls Nov 638k 500k  
Fri 4 Dec Unemployment Rate Nov 6.9% 6.8%  
Fri 4 Dec Average Earnings Nov 0.1% 0.1%  
Fri 4 Dec Factory Orders Oct 1.1% 0.8%