Thursday’s bond market has opened in positive territory following weaker than predicted economic data. The stock markets are showing minor losses with the Dow down 15 points and the Nasdaq down 3 points. The bond market is currently up 3/32 (1.97%), but due to weakness late yesterday, we still will likely see a slight increase in this morning’s mortgage rates.
The first of today’s two economic reports was last week’s unemployment numbers that showed 295,000 new claims for benefits were filed. This was slightly higher than the 294,000 from the previous week and above the 288,000 that was expected by many analysts. This indicates that the employment sector was a bit softer than thought, making the data slightly favorable for bonds and mortgage rates.
March’s New Home Sales report was posted late this morning by the Commerce Department. They announced an 11.4% drop in sales of newly constructed homes last month, falling well short of forecasts. This means the new home portion of the housing sector was weaker than expected, making the data good news for mortgage rates. Unfortunately, this is considered to be a low-importance report and has had a minimal impact on this morning’s rates.
Tomorrow brings us the release of the week’s most important report. The day’s only relevant data is March’s Durable Goods Orders at 8:30 AM ET. This report gives us an indication of manufacturing sector strength by tracking orders for big-ticket items at U.S. factories. These are products that are expected to last three or more years, such as appliances, electronics and airplanes. Current forecasts are calling for an increase in new orders of 0.5%. This would be a sign of manufacturing sector strength, but this data can be quite volatile from month-to-month. Therefore, a small variance between forecasts and the actual results will not heavily influence the markets or mortgage rates. A large decline would be considered good news for bonds and mortgage pricing, while a large rise would indicate strength in the sector. A sign of solid manufacturing growth could lead to higher mortgage rates tomorrow.