Wednesday’s bond market has opened in positive territory with stocks showing minor losses and today’s only data giving us somewhat favorable results. The Dow is currently down 16 points while the Nasdaq has lost 21 points. The bond market is currently up 6/32 (1.92%), but due to noticeable weakness late yesterday we should see an increase in this morning’s mortgage pricing of approximately .125 of a discount point if comparing to Tuesday’s early rates. The amount of the increase you will see depends on how much of an upward revision your lender made intraday yesterday.
The Commerce Department announced late this morning that sales of newly constructed homes rose 2.0% last month. The number of sales was very close to expectations, but an upward change to January’s sales means that February’s increase was a smaller percentage than what was called for. That allows us to consider the data slightly favorable for mortgage rates.
Tomorrow has two pieces of economic data being posted, both at 8:30 AM ET. The more important of the two is February’s Durable Goods Orders. This Commerce Department report gives us a measurement of manufacturing sector strength by tracking new orders for big-ticket items, or products that are expected to last three or more years such as electronics, appliances and airplanes. This data is known to be volatile from month to month but is still considered to be of fairly high importance to the markets. Analysts are expecting it to show a decline in new orders of approximately 2.9%. An increase in orders would be considered negative for bonds as it would indicate economic strength and could lead to higher mortgage rates tomorrow morning. Since these orders are volatile, it will take a wider variance from forecasts for it to move mortgage rates than other data requires.
The second report of the morning will be last week’s unemployment update. It will give us a small snapshot of the employment sector and is expected to show that 268,000 new claims for unemployment benefits were filed last week, up from 265,000 of the previous week. The higher the number of claims, the better the news it is because rising claims hints at a softening labor market. However, since this is only a weekly report, it likely will not have much of an impact on mortgage rates unless it shows a significant variance from forecasts.