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Market Commentary

Updated on April 20, 2018 10:33:56 AM EDT

There is nothing if importance set for release today. That may be bad news for bonds and mortgage rates because some friendly economic data would be quite helpful. The benchmark 10-year Treasury Note yield is now above what looks to be a critical resistance level. What is concerning is that if we stay above 2.91%, there isn’t much to prevent a move to 3.00% or even higher. I suspect 3.00% won’t be easy to crack, but since mortgage rates tend to track bond yields, just testing that threshold means rates would be higher than where they are this morning.

What is worth noting and could work in our favor is the fact that the last time yields were in this area, concerns about their impact on corporate borrowing and economic growth caused a huge sell-off in stocks. That in turn led to funds moving into bonds, driving yields and mortgage rates lower. One could argue that we are ripe for a sequel to that story, although stocks are not as high now as they were when that last happened. However, until we actually see the sell-off in stocks start or yields retreat below 2.91% on their own, there is a fairly high risk of rates moving higher in the immediate future.

Next week has a handful of relevant economic reports that are expected to influence mortgage rates, some of which are considered to be highly important. The most important data comes later in the week, but there is something taking place each day- starting with Existing Home Sales Monday morning. There are also a couple of Treasury auctions mid-week to watch. Look for details on all of next week’s activities in Sunday evening’s weekly preview.

 ©Mortgage Commentary 2018

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PRMI NMLS No. 3094. Branch NMLS 252910. PRMI is an Equal Housing Lender. Some products and services may not be available in all states. Credit and collateral are subject to approval. Terms and conditions apply. This is not a commitment to lend. Programs, rates, terms and conditions are subject to change without notice. The content in this marketing advertisement has not been approved, reviewed, sponsored or endorsed by any department or government agency. Rates are subject to change and are subject to borrower(s) qualification. This office is licensed and examined by the Office of Consumer Credit Commissioner of the State of Texas. Alabama Banking Department Bureau of Banking MC 20316. Arkansas Securities Department 11558. Florida Office of Financial Regulation MLD646. Department of Banking and Finance 6521. Office of Financial Institutions #771. Missouri Division of Finance. Mississippi Department of Banking and Consumer Finance, 3094. Oklahoma Department of Consumer Credit ML010027. Department of Financial Institutions 109282.

PRMI NMLS No. 3094. Branch NMLS 252910. PRMI is an Equal Housing Lender. Some products and services may not be available in all states. Credit and collateral are subject to approval. Terms and conditions apply. This is not a commitment to lend. Programs, rates, terms and conditions are subject to change without notice. The content in this marketing advertisement has not been approved, reviewed, sponsored or endorsed by any department or government agency. Rates are subject to change and are subject to borrower(s) qualification. This office is licensed and examined by the Office of Consumer Credit Commissioner of the State of Texas. Alabama Banking Department Bureau of Banking MC 20316. Arkansas Securities Department 11558. Florida Office of Financial Regulation MLD646. Department of Banking and Finance 6521. Office of Financial Institutions #771. Missouri Division of Finance. Mississippi Department of Banking and Consumer Finance, 3094. Oklahoma Department of Consumer Credit ML010027. Department of Financial Institutions 109282.