Monday’s bond market has opened in positive territory with stocks starting the week in negative ground. The major stock indexes are showing moderate losses with the Dow down 66 points and the Nasdaq down 9 points. The bond market is currently up 7/32 (2.03%), which should improve this morning’s mortgage rates by approximately .125 of a discount point.
There is nothing of importance set for release today that is likely to affect mortgage rates. The rest of the week is pretty busy though, having six economic reports in addition to the first FOMC meeting of the year and a couple of Treasury auctions that have the potential to affect bond trading and slightly move rates.
The calendar starts tomorrow with January’s Consumer Confidence Index (CCI) at 10:00 AM ET. This report is considered to be of moderate importance to the bond market and therefore can move mortgage rates if it shows any surprises. It is an indicator of consumer sentiment, which is important because waning confidence in their own financial situations usually means that consumers are less willing to make large purchases in the near future. Since consumer spending makes up over two-thirds of the U.S. economy, market participants are very attentive to related data. Analysts are expecting to see a small rise from December’s reading, indicating consumer confidence was a little stronger than last month. A reading much smaller than the expected 96.8 would be ideal for the bond market and mortgage rates. A higher reading than forecasts would hint that consumers are more likely to spend in the immediate future, fueling economic growth and possibly pushing mortgage pricing higher tomorrow.
Overall, Wednesday is a pretty safe bet as most important for mortgage rates but Friday is also a key day. Wednesday has the FOMC meeting results that is always big news and Friday’s GDP report is highly important also. And stocks can affect bond trading and mortgage pricing any day, as we have seen with all the recent volatility. With all of this scheduled, there is a decent chance of seeing a very active week in mortgage rates this week. Therefore, please maintain constant contact with your mortgage professional if still floating an interest rate and closing in the near future.