While the technical indicators point out that we are due for a reversal, with the market ripe for a sell off, the uncertainty of a possible government shutdown and political posturing are keeping traders conservative with bonds.
We have a very important week for economic data, but they are being over shadowed by the new fiscal year for the U.S. government and the potential shutdown this evening. If the shutdown does occur, some economic data will not be released. There are no major Treasury auctions this week.
What effect would a government shutdown have?
FHA and VA mortgages will still be available, but in order to process and facilitate these programs, mortgage lenders rely on government employees that will be part of the shutdown shall it occur. If that does take place, expect lenders to face delays that they have no control over.
The looming shutdown is helping rates as of right now, but if a compromise is reached and the shutdown averted, expect rates to increase along with an extended period of volatility.
Work closely with your Mortgage Loan Professional to stay ahead of lender repricing upon news of a compromise.
- Michael Corboy
www.specialtyfinancialmtg.com
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