Wednesday’s bond market has opened in negative territory despite no relevant data being released. Stocks are showing minor gains with the Dow up 18 points and the Nasdaq up 25 points. The bond market is currently down 9/32 (1.72%), which should push this morning’s mortgage rates slightly higher than yesterday’s early pricing. I suspect most lenders will be no more than .125 of a discount point higher today than they were yesterday.
Today’s only relevant event comes this afternoon when the Fed releases the minutes from the most recent FOMC meeting. 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 and changes in mortgage pricing.
Last week’s unemployment figures is tomorrow’s only data. The 8:30 AM ET release is expected to show that 270,000 new claims for unemployment benefits were filed last week. This would be a decline from the previous week’s 276,000 initial filings. The larger the number of new claims, the better the news it is for bonds and mortgage rates because rising claims indicate a softening employment sector. Because this report is only a weekly snapshot, it often has a minimal impact on mortgage rates. However, with so little being posted this week, we may see a slightly stronger reaction than usual.
With exception to a couple of Fed speaking engagements, there isn’t much left on the calendar this week that is expected to affect mortgage rates. That leaves stock movement as the most likely factor to drive bond trading and mortgage rates tomorrow and Friday.