Bond Market Update
Market UpdateFriday, May 22, 2020
What's going on and why does it matter?
Mortgage bonds opened slightly higher this morning as tensions continue to rise between the US and China after China announced on the first day of its week-long National People’s Congress that it would enact a new national-security law on Hong Kong following the pro-democracy protests last year. President Trump has already warned that the US would respond “very strongly.” Meanwhile, markets are also rattled that China did not set an annual economic growth target at the meeting due to the unpredictable impact of the global pandemic. This is the first time a goal has not been set since it began publishing them in 1990. Stocks are set to open lower and oil prices have already plunged over 5% on the news. The Fed is scheduled to purchase up to $4.545 billion of mortgage bonds today. The market closes early today and is fully closed Monday for Memorial Day.
What should you do about it?
Watch and see if mortgage bonds can continue to rebound, but be prepared to lock your rate if mortgage bonds fall back below their 10-day moving average.
Economic CalendarEconomic reports that may impact mortgage rates this week:
|Tue 19 May||Building Permits||Apr||1.350M||1.000M||1.074M|
|Tue 19 May||Housing Starts||Apr||1.216M||950k||891k|
|Thu 21 May||Initial Jobless Claims||Week of May 11||2.981M||2.400M||2.438M|
|Thu 21 May||Philly Fed Business Index||May||-56.6||-41.5||-43.1|
|Thu 21 May||Existing Home Sales||Apr||5.27M||4.30M||4.33M|