Monday’s bond market has opened down slightly due to a lack of relevant economic news to drive trading. The stock markets are kicking the week off with moderate gains of 56 points in the Dow and 16 points in the Nasdaq. The bond market is currently down 3/32 (1.72%), but we should still see an improvement of approximately .125 of a discount point in this morning’s mortgage rates due to strength late Friday.
The rest of the week brings us the release of six economic reports that have the potential to affect mortgage rates in addition to a couple of Treasury auctions, but none are set for tomorrow. We also have the start of corporate earnings season that can significantly impact the stock markets and help direct funds into or away from bonds. I suspect stocks will help dictate bond and mortgage rates direction tomorrow. Strong earnings reports should fuel a stock rally that pressures bonds and leads to higher mortgage rates. On the other hand, disappointing earnings news should make bonds more attractive to investors and lead to rate improvements.
There are three reports coming Wednesday, two of which are considered to be highly important to the bond and mortgage markets. They are March’s Retail Sales and Producer Price Index reports during morning trading and the Fed’s Beige Book report during afternoon hours. Wednesday also has the 10-year Treasury auction scheduled that often influences the bond market enough to affect mortgage pricing.
Overall, look for Wednesday to be the key day of the week but Thursday does have important data also. Because we also have earnings reports to watch this week in addition to the economic releases and auctions, there is a high probability of seeing an active week in the financial and mortgage markets. Therefore, please maintain contact with your mortgage professional if still floating an interest rate and closing in the near future.