Daily Rate Lock Advisory

Indexes Affecting Rate Lock

High

Negative

ISM Index (Institute for Supply Management)

This week’s calendar kicked-off late this morning with the release of the Institute for Supply Management's (ISM) July manufacturing index that came in at 55.6. Analysts were expecting to see a reading in the neighborhood of 54.0 after June’s 53.3. The higher reading means surveyed manufacturing executives felt much better about business conditions last month than they did in June. As a sign of economic strength, this report has to be considered negative for bonds and mortgage rates. Fortunately, traders are more focused on the drop in oil prices that eases inflation concerns.

High

Positive

Iran War Headlines

The remainder of the week has five more relevant economic reports scheduled, including the almighty monthly governmental Employment report Friday morning. We will also be watching for headlines from the Midde East and the Strait of Hormuz to have an impact on rates, which appears to be contributing to this morning’s early bond gains after President Trump called off more attacks on Iran because negotiators were supposedly back at the table per se. This gives hope that a peace deal can be reached soon. However, the rollercoaster ride of peace deals only to be short-lived is old news now. In other words, these headlines are good news for rates this morning, but should be taken cautiously as the improvement can easily be erased if another ship is attacked in the Strait of Hormuz or military action resumes again.

Medium

Unknown

Factory Orders

June's Factory Orders data is set for release at 10:00 AM ET tomorrow morning. This report is similar to last week’s Durable Goods Orders report but tracks new orders for both durable and non-durable goods during the month of June. Since a significant portion of the data was released previously, this version likely will not have a big impact on the markets. Analysts are expecting to see an increase in new orders of approximately 0.3% to rebound from April's 1.3% decline. An unexpected decline would be considered good news for bonds and mortgage pricing, but it will take a large variance from forecasts for this report to influence mortgage rates.

Medium

Unknown

Fed Talk

Also worth noting this week is the fact the Fed's required pre-FOMC meeting quiet period is no longer applicable, so we will be hearing from individual Fed members in the coming days. Normally, they wouldn't be of much interest so close to the FOMC events last Wednesday, but the three dissenting votes that felt the Fed should have raised key rates boosts the possibility of seeing a noticeable reaction to one of the speeches. These speaking events are sprinkled throughout the week, meaning they could come into play at any time.

High

Unknown

Employment Situation

Overall, Friday is the most important day for rates due to the importance the monthly Employment report carries. The calmest day may be Thursday unless something unexpected happens. We are expecting to see an active week for rates, so please proceed cautiously if still floating an interest rate and closing in the near future.

Rate Lock Advisory

Mortgage Rate Trend

Indexes Affecting Rate Lock

ISM Index (Institute for Supply Management)

Iran War Headlines

Factory Orders

Fed Talk

Employment Situation

Float / Lock Recommendation