Monday’s bond market has opened flat despite another round of early weakness in stocks. The major stock indexes are starting the week with relatively moderate losses, pushing the Dow lower by 43 points and the Nasdaq down 22 points. The bond market is currently up 2/32 (1.94%), but we should still see a slight improvement in this morning’s mortgage rates if comparing to Friday’s morning pricing due to strength Friday afternoon.
There is no economic data scheduled for release today or tomorrow that is expected to affect mortgage rates. We will get six economic reports that are relevant to the bond market and mortgage pricing between Wednesday and Friday though. Some of that data is considered to be highly important. In addition to the data, there are also two Treasury auctions that we need to watch.
The first event of the week will actually be one of those Treasury auctions when 10-year Notes will be sold followed by 30-year Bonds Wednesday. The 10-year sale is the more important of the two as it will give us a better indication for demand of mortgage-related securities. If the sales are met with a strong demand from investors, we should see the bond market move higher during afternoon trading the days of the auctions. But a lackluster interest from buyers, particularly international investors, would indicate a waning appetite for longer-term U.S. securities and lead to broader bond selling. The selling in bonds would result in upward revisions to mortgage rates. Results will be posted at 1:00 PM ET each day, so any reaction will come during early afternoon trading.
Overall, I believe Wednesday is likely going to be the most active day for mortgage rates with Friday not far behind. The best candidate for calmest day now appears to be today. We do have some very important economic data coming this week, and need to be attentive to the stock markets with its recent volatility influence bond trading, so please proceed cautiously if still floating an interest rate and closing in the near future.