Monday’s bond market has opened in positive territory, recovering part of Friday’s sell-off. The stock markets are starting the week with minor losses of 23 points in the Dow and 17 points in the Nasdaq. The bond market is currently up 9/32 (2.37%), which should improve this morning’s mortgage rates by approximately .250 of a discount point from Friday’s morning pricing.
There is nothing of importance scheduled for release today or tomorrow. The rest of the week has three pieces of economic data that are relevant to mortgage rates in addition to two Treasury auctions that can also be influential. The first auction comes Wednesday while the data begins Thursday morning.
The two relevant Treasury auctions will be held Wednesday and Thursday. 10-year Treasury Notes will be sold Wednesday while 30-year Bonds will be sold Thursday. Results of both auctions will be posted at 1:00 PM ET on the sale days. If investor demand was high, we may see bonds rally during afternoon trading, however, weak demand for the securities could lead to selling and an increase to mortgage rates. It is common to see some pressure in bonds right before these sales as investors prepare for them, but as long as the sales are not weak those pre-auction losses are usually recovered once they are completed.
Overall, look for Thursday or Friday to be the biggest day of the week with both having important economic data scheduled. The least important day of the week will probably be tomorrow. We saw plenty of movement in the markets and mortgage pricing again last week and it is quite likely that this week will also be active. However, I suspect that it will be to a less degree than last week was. The stock markets will also influence bond trading and mortgage rates, so watch the major indexes in addition to the economic reports. It is highly recommended that you maintain contact with your mortgage professional this week if still floating an interest rate.