Three things that could impact rates this week

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Published Date 4/10/2023

Today's Mortgage Rate Summary

How Rates Move:

Conventional and Government (FHA and VA) lenders set their rates based on the pricing of Mortgage-Backed Securities (MBS) which are traded in real time, all day in the bond market. This means rates or loan fees (mortgage pricing) moves throughout the day, being affected by a variety of economic or political events. When MBS pricing goes up, mortgage rates or pricing generally goes down. When they fall, mortgage pricing goes up.

Rates Currently Trending: Neutral

Mortgage rates are edging higher today. The MBS market worsened by -14 bps last week. This was not enough to increase mortgage rates or fees. The market experienced high volatility last week.

This week's Rate Forecast: Neutral

Three Things: These are the three areas that have the greatest ability to impact rates this week. 1) Inflation, 2) Central Banks and 3) Geopolitical

1) Inflation: The biggest economic release of the week is Tuesday's CPI data which is expected to show an additional MOM gain, the spread of that gain will have a big impact on rates. We will also get PPI on Wednesday which is expected to weaken. We will also see some inflationary data in Import/Export data and UofM Consumer Sentiment.

2) Central Banks: We will get a key interest rate decision out of the Bank of Canada which had "paused" at their prior meeting. The IMF is also a main focus as this week they have their annual meetings this week. Our own Federal Reserve will release the Minutes from their last FOMC meeting on Wednesday and we will hear from several Talking Fed.

3) Geopolitical: The bond market is very much focused on the heightened military stress with China/Taiwan as well as continued concern over Ukraine/Russia.

Treasury Sales: We have a very important 30 year Bond auction on Thursday.

04/11 3 year note

04/12 10 year note

04/13 30 year bond

This week's Potential Rate Volatility: High

This morning markets are under mild pressure. Volatility is low to start but will spike on the inflation reports later this week.

Bottom Line:

If you are looking for the risks and benefits of locking your interest rate in today or floating your loan rate, contact your mortgage professional to discuss it with them.

Source: TBWS

All information furnished has been forwarded to you and is provided by thetbwsgroup only for informational purposes. Forecasting shall be considered as events which may be expected but not guaranteed. Neither the forwarding party and/or company nor thetbwsgroup assume any responsibility to any person who relies on information or forecasting contained in this report and disclaims all liability in respect to decisions or actions, or lack thereof based on any or all of the contents of this report.

All loans are subject to credit approval. Interest rates are subject to change daily and without notice. Current interest rates shown our indicative of market conditions and individual qualifications and will vary upon your lock-in period, occupancy, loan type, credit score, purpose and loan to value and lending source.