Monday’s bond market has opened in positive territory with stocks showing sizable losses during early trading. The Dow is currently down 160 points while the Nasdaq has lost 39 points. The bond market is currently up 14/32 (2.06%), which should improve this morning’s mortgage rates by approximately .250 – .375 of a discount point from Friday’s morning pricing.
There is nothing of importance scheduled for release today. We are seeing a positive open in bonds due to stock selling here and favorable inflation news from overseas. The rest of the week brings us the release of only three monthly reports that are relevant to the bond market and mortgage rates, but one of them is considered to be extremely important. In addition to those reports, we also will get the minutes from the last FOMC meeting that has the potential to influence the bond market and quite possibly mortgage rates the middle of the week.
The Commerce Department will post November’s Factory Orders data late tomorrow morning. This data gives us a fairly important measurement of manufacturing sector strength. It is similar to the Durable Goods Orders release that was posted just before Christmas, except this report includes orders for both durable and non-durable goods. Durable goods are items that are expected to last three or more years such as appliances, electronics and airplanes. Examples of non-durable goods are food and clothing. Analysts are expecting to see a decline of 0.4% in new orders. This report generally does not have a huge impact on the bond market or mortgage rates, but it can influence bond trading enough to create a minor change in rates if it shows a sizable variance from forecasts. The larger the decline, the better the news it is for mortgage pricing.
Overall, Friday is the key day of the week with the almighty Employment report being posted, but Wednesday also has a chance to be pretty active. The least active day will likely end up being Thursday. Even though this doesn’t appear to be an overly busy week, please still keep an eye on the markets and maintain contact with your mortgage professional if still floating an interest rate as a couple of this week’s events have the potential to cause market volatility.