Wednesday’s bond market has opened down slightly with stocks showing early strength. The major stock indexes are showing noticeable gains, pushing the Dow higher by 77 points and the Nasdaq up 31 points. The bond market is currently down 4/32 (1.89%), but we still should see a slight improvement in this morning’s mortgage rates due to strength in bonds late yesterday.
Today’s only mortgage rate-relevant events take place during afternoon trading. The first is the 10-year Treasury Note auction that will be followed by a 30-year Bond sale tomorrow. The results of these auctions will be posted at 1:00 PM ET each day. If investor demand for the securities was strong, the bond market could rally during afternoon trading, leading to lower mortgage rates. If the sales were met with a poor level of interest, the afternoon weakness may cause afternoon upward revisions to mortgage pricing.
The minutes from the last FOMC meeting will also be posted this afternoon. 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 first rate hike will take place, could cause afternoon volatility in the markets and possible changes in mortgage pricing later today. This is one of those reports that can cause a great deal of volatility or actually be a non-factor, depending if there are any surprises.
Last week’s unemployment figures are tomorrow’s only relevant economic data. The 8:30 AM ET release is expected to show that 285,000 new claims for unemployment benefits were filed last week. This would be a sizable jump from the previous week’s 268,000 initial claims. The higher the number of new claims, the better the news it is for mortgage rates as rising claims is a sign of employment sector weakness. However, because this report tracks only a single week’s worth of new claims, it usually takes a surprise spike or drop for it to noticeably affect mortgage rates.