Thursday’s bond market has opened in positive territory despite unfavorable economic news. Stocks are helping the cause with the Dow down 97 points and the Nasdaq down 29 points. The bond market is currently up 11/32 (1.72%), but due to weakness late yesterday we should see little change in this morning’s rates. If your lender worsened pricing yesterday afternoon, you should see an improvement this morning by the same amount.
Yesterday afternoon’s release of the minutes from last month’s FOMC meeting did not give us too many surprises but did reaffirm recent comments made by Chairperson Janet Yellen that indicate the Fed is more concerned about global economic growth and is likely to take a cautious approach towards raising key short-term interest rates. Both her comments and the minutes seem to point towards no change in key rates at the FOMC meeting later this month. While this was basically good news for the bond market, the positive reaction came last week following her speaking engagement. It was old news when we saw it yesterday afternoon.
Today’s only data was last week’s unemployment figures at 8:30 AM ET. It showed that 267,000 new claims for unemployment benefits were filed last week, down from the previous week’s 276,000 initial filings. The decline in claims hints at a strengthening employment sector, making the data bad news for bonds and mortgage rates. Fortunately, this is only a weekly snapshot, so its impact on today’s trading has been minimal.
After the markets close today, there is a speaking engagement that includes a conversation with current Fed Chair Janet Yellen and former chairs Ben Bernanke, Alan Greenspan and Paul Volcker. This is scheduled to take place at 5:30 PM ET, so any reaction to something said won’t come until tomorrow’s open.
There is no relevant economic data scheduled for release tomorrow. Unless we get something unexpected and significant in tonight’s Fed talk, we can look towards stocks for bond market and mortgage rate direction.