Monday’s bond market has opened in positive territory due to comments from overseas regarding the Greece situation and weaker than expected economic news here. The stock markets are starting the week off in negative ground with the Dow down 52 points and the Nasdaq down 7 points. The bond market is currently up 11/32, but due to weakness late Friday we likely will see little change in this morning’s mortgage rates if comparing to Friday’s morning pricing.
Today’s sole relevant economic data was January’s Existing Home Sales report by the National Association of Realtors at 10:00 AM ET. They announced that home resales fell 4.9% last month, slipping to their lowest level in 9 months. This was also weaker than what analysts were expecting, indicating the housing sector was softer than many had thought. That makes the data favorable for the bond and mortgage markets.
Tomorrow is going to be a very interesting day. There is relevant economic data scheduled for release, but it will be Fed Chair Yellen’s semi-annual testimony on the status of the economy and monetary policy in front of the Senate Banking Committee that will draw the most attention. She will repeat this Wednesday for the House Financial Services Committee. Both appearances are set to start at 10:00 AM ET. Her prepared statement tomorrow will likely have the bigger influence on the markets but the Q&A session that follows may bring a surprise response also. Wednesday’s opening statement will probably mirror tomorrow’s statement. Therefore, it is common for day two to not have the impact on the markets as day one does.
February’s Consumer Confidence Index (CCI) will be posted at 10:00 AM ET tomorrow morning also. This Conference Board index measures consumer confidence in their personal financial situations, giving us a measurement of consumer willingness to spend. If consumers are feeling good about their own financial and employment situations, they are more apt to make large purchases in the near future. Since consumer spending makes up over two-thirds of the economy, related data is considered important in terms of gauging economic activity. It is expected to show a decline in confidence from the 102.9 reading in January to 99.3 this month. A lower reading would be considered good news for bonds and mortgage rates since it would indicate consumers are less likely to make a large purchase in the near future than many thought.
Overall, I think tomorrow is the most important day of the week due to Fed Chair Yellen’s congressional testimony although Thursday and Friday’s economic data can also cause a fair amount of volatility in the markets. The calmest could be Wednesday but we should still see some movement in rates that day also. If floating an interest rate, it would be extremely prudent to maintain contact with your mortgage professional this week.