Tuesday’s bond market has opened in positive territory with stocks in negative ground and no significant economic data scheduled for release. The major stock indexes are showing moderate losses with the Dow down 62 points and the Nasdaq down 25 points. The bond market is currently up 11/32 (1.72%), but because bonds weakened after pricing was posted yesterday, this morning’s improvement in rates will likely be limited to less than .125 of a discount point.
There is nothing of importance set for today that is expected to affect bond trading enough to influence rates. If we see bonds turn direction and give up their early gains, it will probably be a result of an upward move in stocks. On the other hand, if stocks extend current losses, bonds may benefit, possibly leading to a slight intraday improvement to mortgage pricing later today.
Tomorrow morning also has no relevant economic data for the markets to digest. However, we will get the minutes from the last FOMC meeting during afternoon trading. Market participants will be looking at them closely as they give us insight to the Fed’s current thought process and individual Fed member opinions. Any surprises in the 2:00 PM ET release, particularly about inflation, economic conditions or when the next rate hike will take place, could cause afternoon volatility in the markets tomorrow and possible changes in mortgage pricing.
After tomorrow’s release, there isn’t much left to drive bond trading the rest of the week. We do have a couple of Fed speaking engagements, including Chair Janet Yellen, but none are expected to be market movers. There also is the weekly unemployment update early Thursday, which is considered to be of low importance. There is a decent probability of seeing a relatively calm couple of days for the mortgage market. Still, it is always prudent to maintain contact with your mortgage professional if still floating an interest rate because circumstances can change at any time.