Wednesday’s bond market has opened down slightly with stocks relatively calm and nothing of importance being posted this morning. The Dow is currently down 8 points while the Nasdaq has lost 14 points. The bond market is currently down 3/32 (2.11%), which should keep this morning’s mortgage rates at yesterday’s levels.
Today has two events worth watching but both come during afternoon trading. The first is the 10 year Treasury Note sale. It has the potential to influence rates. If these type of sales are met with a strong demand from investors, the broader bond market tends to improve after results are posted. But a lackluster interest from buyers, particularly international investors, would indicate a waning appetite for longer-term U.S. securities and lead to bond selling. The selling in bonds would result in upward revisions to mortgage rates. Results will be posted at 1:00 PM ET, so any reaction will come during early afternoon trading. We will repeat this process tomorrow with the 30-year Bond auction.
The first economic report of the week will be the Federal Reserve’s Beige Book at 2:00 PM ET today. This report is named simply after the color of its cover and details economic conditions throughout the U.S. by Fed region. Since the Fed relies heavily on it during their FOMC meetings, its results can have a fairly big impact on the financial markets and mortgage rates if it reveals any surprises, particularly regarding inflation, unemployment or future hiring. Any reaction to the report though will also come during mid-afternoon trading.
Tomorrow’s only data is last week’s unemployment update. It will give us a small snapshot of the employment sector and is expected to show that 275,000 new claims for unemployment benefits were filed last week. The higher the number of claims, the better the news it is because rising claims hints at a softening labor market. However, since this is only a weekly report, it likely will not have much of an impact on mortgage rates unless it shows a significant variance from forecasts.