Thursday’s bond market has opened in positive territory even though this morning’s economic data did not give us favorable results. The stock markets are showing early losses with the Dow down 54 points and the Nasdaq down 1 point. The bond market is currently up 12/32 (2.25%), which with yesterday’s post-FOMC move should improve this morning’s mortgage rates by approximately .250 of a discount point if comparing to Wednesday’s morning pricing.
Both of this morning’s economic releases gave us news that was negative for bonds and mortgage rates, but fortunately neither is considered to be important or highly influential on the markets. The first was last week’s unemployment update at 8:30 AM ET. It showed that 271,000 new claims for unemployment benefits were filed last week, down from the previous week’s 282,000 initial filings. Analysts were expecting to see 276,000 claims. Because the number was lower than expected and declining initial claims hints at a strengthening employment sector, we need to consider this bad news for mortgage rates.
The second report of the morning and the final economic release of the week was November’s Leading Economic Indicators (LEI) at 10:00 AM ET. The Conference Board announced an increase of 0.4% that means the indicators are predicting a stronger rate of economic growth over the next several months than many had thought. Since bonds tend to thrive in weaker economic conditions, this report is also negative for bonds and mortgage rates.
Tomorrow has no relevant data or other events scheduled that are expected to affect mortgage rates. There is a lunch time speaking engagement by Fed member Jeffrey Lacker that could cause some movement in the markets if he says anything surprising. Especially following yesterday’s FOMC events. With exception to that, we could see a fairly calm day in mortgage rates tomorrow.