What's going on and why does it matter?
Mortgage bonds opened flat this morning amidst a sharp sell-off in global stock prices overnight. Financial markets are concerned about a second wave of COVID-19 infections after a spike in China and the US over the weekend. There were also some disappointing economic reports in Europe and China that seem to indicate the economic recovery is on shaky ground. Meanwhile, here in the US, racial tensions are simmering following the shooting in Georgia of another black man by white officers.
The economic calendar is quite full this week, with the NY Fed (Empire State) Manufacturing Index significantly beating expectations this morning at -0.2 vs. market expectations of -29.8. The Fed is scheduled to purchase an average of $4.6 billion per day of mortgage bonds this week, which is slightly higher than its daily average purchases last week.
What should you do about it?
Watch for continued volatility in the next few trading sessions as the market tries to find its footing.
Economic reports that may impact mortgage rates this week: