Friday’s bond market has opened in positive territory despite stronger than expected headline readings in today’s economic data. The stock markets are helping to boost bond prices by showing sizable losses during morning trading. The Dow is currently down 136 points while the Nasdaq has fallen 31 points. The bond market is currently up 7/32 (2.48%), but due to weakness late yesterday, we will likely see little change in this morning’s mortgages.
We saw mortgage bonds weaken during afternoon trading yesterday, causing many lenders to revise their rates higher late in the day. If your lender was in the majority, then you should see an improvement in today’s early pricing that erases that upward revision. If your lender did not make a move intraday yesterday, then you should see no change in this morning’s rates as today’s strength offsets the weakness from late yesterday.
Today’s only relevant economic data was June’s Durable Goods Orders at 8:30 AM ET. It showed a 0.7% increase in new orders for big-ticket products that exceeded forecasts of a 0.3% increase by a relatively minor margin considering the normal volatility in this data. A secondary reading that tracks new orders excluding more pricey and volatile transportation items, such as airplanes, showed a 0.8% increase when analysts were calling for a 0.7% rise. There were some secondary readings that showed downward revisions to May’s data, but I think a good portion of today’s move in bonds is more a result of stock selling than anything else.
Next week brings us the release of a large amount of economic data and other events that may affect mortgage rates, including three of the most influential reports we get regularly. In addition to the heavy data and a couple of potentially relevant Treasury auctions, there is also another FOMC meeting set for next week. None of them are set for Monday, but we have multiple items scheduled every other day. There is little doubt that we will see a very active week in the financial and mortgage markets. Look for details on next week’s schedule in Sunday evening’s weekly preview.