Friday’s bond market has opened up slightly in very light trading. The stock markets are showing minor gains with the Dow up 48 points and the Nasdaq up 23 points. The bond market is currently up only 2/32 (2.25%), which with Wednesday’s afternoon strength should be enough to improve this morning’s mortgage rates by approximately .125 of a discount point.
The bond market improved Wednesday after results of the 7-year Treasury auction were posted at 11:30 AM ET. However, this was not due to a particularly strong auction. In fact, the indicators we use to measure investor demand showed an average level of interest in the securities. That is likely why we saw bond prices improve yet little change in mortgage rates. There was so little volume in bonds Wednesday afternoon that the gains were not considered credible.
There is no relevant economic data being released today and with many traders still home for the holiday weekend, we should see a calm day in mortgage rates. The light trading from the holiday may allow bonds and stocks to show some movement, but I don’t believe mortgage lenders will be quick to react. Any movement in today’s markets will probably be considered in Monday’s pricing when staff and volume return to the marketplace.
Next week has a similar holiday schedule as this week had, but it brings us much less economic data. There are a couple of reports scheduled for release compared to this week’s full agenda, but next week does have a highly important piece of data set. It will come Friday, making what should have been a light day between the holiday and weekend now pretty interesting. Look for details on it and the rest of next week’s calendar in Sunday evening’s weekly preview.