Monday’s bond market has opened in positive territory despite strong gains in stocks. The major stock indexes are showing sizable improvements with the Dow up 165 points and the Nasdaq up 39 points. The bond market is currently up 12/32 (2.07%), but due to some weakness late Friday we will likely see little change in this morning’s mortgage rates if comparing to Friday’s morning pricing.
February’s Industrial Production report was posted at 9:15 AM ET this morning, revealing a 0.1% increase in output at U.S. factories, mines and utilities. This was weaker than the 0.3% increase that was expected, making the data good news for bonds and mortgage rates. Also worth noting, but not of much consequence at this point, was a downward revision in January’s output (from up 0.2% to down 0.3%). These readings hint that portions of the manufacturing sector were not doing as well as many had thought as the new year started, making them favorable for bonds and mortgage rates.
Tomorrow has one piece of economic news to watch but it is not considered to be highly important. The Commerce Department will release February’s Housing Starts data at 8:30 AM ET tomorrow morning. It tracks construction starts or groundbreakings of new housing projects. It doesn’t usually cause much movement in mortgage rates and is considered one of the less important reports we see each month. Tomorrow’s release is expected to show a decline in housing starts, indicating weakness in the housing sector. Good news for the bond market and mortgage rates would be a sizable decline in new starts, but unless we see a large variance from forecasts the data likely will not lead to a noticeable move in mortgage pricing.
Overall, look for the most movement in mortgage rates Wednesday due to the FOMC meeting adjournment, their updated economic forecasts and press conference with Chairperson Janet Yellen. None of this week’s economic data is of too much concern, but it coupled with a sizable move in stocks can cause a moderate change in mortgage rates. The least important day will probably be Friday. The Fed events are just too important to the markets to ignore, so it would be prudent to maintain contact with your mortgage professional the next several days if floating an interest rate and closing in the near future.