Thursday’s bond market has opened in negative territory even though stocks are doing the same. The major stock indexes are showing modest losses with the Dow down 28 points and the Nasdaq down 11 points. The bond market is currently down 3/32 (1.91%), which should keep this morning’s mortgage rates at yesterday’s levels.
Besides the weekly unemployment numbers, we also have a 30-year Bond auction to watch today. Yesterday’s 10-year Note sale went fairly well, but not strong enough to fuel a bond rally. Several of the benchmarks we use to gauge investor demand showed a decent level of interest. If today’s 30-year Bond sale goes equally well or better, we could see some improvement in bonds, possibly leading to a downward revision to rate later today. Results will be posted at 1:00 PM, so any reaction should come shortly after that.
The FOMC minutes that were released yesterday afternoon did give us some interesting insight. They showed that while some FOMC members felt the first hike to key short-term interest rates will come in June of this year as many market participants are predicting, others think that it may not come until sometime in 2016. The later date is significant to the bond market, so further indications that may happen will certainly affect trading and mortgage rates.
Today’s only economic data was last week’s unemployment figures that revealed 281,000 new claims for unemployment benefits were filed. This was an increase from the previous week’s revised total of 267,000, but fell a little short of the 285,000 that was forecasted. Since the higher the number of claims, the better the news it is for mortgage rates, we can consider the data neutral-to-slightly positive. It wasn’t enough of a variance to have a noticeable impact on today’s bond trading or mortgage pricing.
Tomorrow has nothing of importance scheduled for release. Normally, we could look for stocks to indicate bond and mortgage rates direction, but traditional patterns aren’t being followed recently. Therefore, we will have to wait and see what kind of mood bond traders are in tomorrow.