Friday’s bond market has opened flat even though stocks are in heavy sell mode. The Dow is currently down 262 points while the Nasdaq has fallen 74 points. The bond market is currently down 1/32 (1.89%), which should keep this morning’s mortgage rates at yesterday’s levels.
This morning’s economic data gave us mixed results, but with stocks selling off I don’t believe the results of the reports even matter to traders today. The first of the three reports released today was March’s Consumer Price Index (CPI) at 8:30 AM ET. It showed that the overall CPI reading rose 0.2% as did the more important core data that excludes more volatile food and energy prices. Analysts were expecting to see a 0.3% rise in the overall and only a 0.1% increase in the core data. The readings indicate that inflationary pressures at the consumer level of the economy remain pretty subdued. That is generally good news for bonds and mortgage pricing, although the higher core reading makes us consider today’s report slightly negative for mortgage rates.
Next up was the University of Michigan’s Index of Consumer Sentiment for April just before 10:00 AM ET. It came in at 95.9, exceeding analysts’ forecasts by almost two points. That means surveyed consumers were more optimistic about their own financial and employment situations than many had thought. Since rising confidence usually translates into stronger levels of consumer spending, we should also consider this report bad news for mortgage rates.
The Conference Board closed this week’s agenda with their Leading Economic Indicators (LEI) for March at 10:00 AM ET. They announced an increase of 0.2% that fell just shy of the 0.3% that was predicted. Because these indicators attempt to predict economic activity over the next several months, the weaker reading allows us to say it is somewhat favorable for bonds and mortgage shoppers. Unfortunately, it was the least important of today’s three reports and has had little influence on this morning’s rates.
Next week brings us few relevant economic reports and what is scheduled will all be posted the latter days. With nothing of relevance scheduled until Wednesday, we can expect stocks and overseas news to play the biggest roles in mortgage rates movement the first couple days. Look for details on the next week’s activities in Sunday evening’s weekly report.