Friday’s bond market has opened in negative territory again with nothing being released to offset this downward momentum. Stocks are showing solid gains with the Dow up 148 points and the Nasdaq up 38 points. The bond market is currently down 4/32 (1.95%), which should push this morning’s mortgage rates higher by approximately .125 of a discount point over Thursday’s early pricing.
It was another active afternoon for bonds yesterday as they slipped further into negative ground during late morning and lunch time trading. News of a fairly decent 30-year Bond auction helped to recover some of the secondary losses but they still closed in the red. The activity caused many lenders to revise rates lower early, followed by some improving pricing post-auction. How much of an increase you are seeing today depends on what moves your lender made intra-day yesterday.
The benchmark 10-year Treasury Note yield is still within that range that it could make a move much higher or drop lower. The longer it remains above 1.92%, the more concerned we should be that it will break above 2.00%. Once that is done, there is a lot of room for it to move higher in my opinion. Since mortgage rates tend to track bond yields, this would not be good news for mortgage shoppers.
Next week has a handful of relevant economic releases that may affect mortgage rates in addition to a FOMC meeting that will be followed by a Fed press conference and revised economic projections. There is nothing of importance set for Monday, so we can expect weekend news and possibly stock movement to dictate bond and mortgage rate direction as the week starts. Look for details on next week’s calendar in Sunday evening’s weekly preview.