Friday’s bond market has opened flat following mixed economic news. The stock markets are relatively calm also with the Dow down 27 points and the Nasdaq nearly unchanged from yesterday’s close. The bond market is currently down 1/32, which should keep this morning’s mortgage rates unchanged from Thursday’s morning pricing.
Yesterday’s 7-year Treasury Note auction was uneventful for the most part with investor demand in the securities nearly at the same level as Wednesday’s 5-year Note sale. That prevented much of a reaction in the bond market and mortgage rates during afternoon trading yesterday.
There were two pieces of moderately important economic data posted this morning. The first was July’s Personal Income and Outlays report at 8:30 AM ET. The Commerce Department announced a 0.2% increase in income and a 0.1% decline in spending. Both readings were softer than what analysts were expecting, indicating weaker economic activity than many had thought. That makes the data good news for bonds and mortgage rates.
The second was the University of Michigan’s revised Index of Consumer Sentiment for August just before 10:00 AM. It was the bad news of the morning, coming in at 82.5 when forecasts were calling for a reading of 80.0. That means surveyed consumers were more optimistic about their own financial situations and are likely to spend more in the immediate future. Because consumer spending makes up such a large part of our economy, we should consider the data negative for mortgage rates.
Next week doesn’t have a high number of economic reports scheduled but most of what is being released is considered to be highly important to the financial and mortgage markets. The markets will be closed Monday in observance of the Labor Day holiday, although there is no early close for bonds or stocks today.