Friday’s bond market has opened in positive territory following mixed economic data. The major stock indexes are showing minor gains with the Dow up 28 points and the Nasdaq up 16 points. The bond market is currently up 8/32 (1.97%), but due to weakness late yesterday we likely will see little change in this morning’s mortgage rates.
We again saw afternoon selling in bonds yesterday that caused many lenders to make upward intra-day revisions to mortgage rates. A contributing factor to yesterday’s action was a weak 7-year Treasury Note auction that followed a poor 5-year Note sale Wednesday. Both sales indicated a lackluster investor interest in the securities that spilled over to the broader bond market after results were posted at 1:00 PM ET. If your lender did revise their rates higher late yesterday, you should see an improvement of approximately the same amount in this morning’s pricing. If your lender did not adjust for the move yesterday, you should see little change in this morning’s rates.
The first of today’s two relevant economic reports was the 2nd revision to the 4th Quarter Gross Domestic Product (GDP) at 8:30 AM ET. It came in at a 2.2% annual rate of growth during the quarter that matched the first revision. Analysts were expecting to see an upward revision, indicating that the economy was actually a little stronger during the last three months of last year than previously thought. The softer reading is technically good news for bonds and mortgage rates, but since this data is quite aged at this point, its impact on today’s rates has actually been fairly minimal.
Also posted this morning was the University of Michigan’s revised March Consumer Sentiment Index just before 10:00 AM ET. It showed a reading of 93.0 that exceeded forecasts and was higher than the preliminary reading of 91.2. This means surveyed consumers felt better about their own financial and employment situations than many had expected. Because rising confidence usually translates into stronger levels of consumer spending that fuels economic growth, we should consider this reading bad news for mortgage rates.
Next week brings us plenty of economic data for the markets to digest, including a couple of key reports. One of those being the almighty monthly Employment report. There is relevant data scheduled for release Monday when February’s Personal Income and Outlays report is posted. Look for details on it and the rest of the week’s schedule in Sunday evening’s weekly preview.