Monday’s bond market has opened in negative territory, giving back some of Friday’s gains. The stock markets are starting the week mixed with the Dow down 13 points and the Nasdaq up 8 points. The bond market is currently down 14/32 (2.19%), which should push this morning’s mortgage rates higher by approximately .125 of a discount point.
There is nothing of importance set for release today or tomorrow that is expected to affect mortgage rates. The rest of the week brings us the release of four economic reports worth watching. Everything on the calendar that has the potential to influence rates will take place the middle and latter days. A couple of the reports are considered to be of elevated importance to the bond market and therefore mortgage rates. This raises the possibility of seeing noticeable movement in rates multiple days this week.
The calmest day for mortgage rates will likely be tomorrow while the best candidates for most active day are Wednesday and Thursday. Both have key economic data being posted that will attract plenty of attention in the bond market along with long-term Treasury auctions. We also need to watch stocks for mortgage rate movement. Generally speaking, stock weakness usually makes bonds more attractive while stock gains tend to draw funds from bonds, leading to higher mortgage rates.
This morning’s bond weakness has pushed the yield on the benchmark 10-year Treasury Note back up to 2.19%. This is of concern because it puts us back into the risk of heading towards and possibly above 2.35%. Friday’s rally kept us optimistic that we would start a downward trend. This week could be instrumental in telling us if that is more likely to happen or if it will retreat back towards 2.00%. Since mortgage rates tend to track bond yields, the lower yields are, the better the news it is for mortgage shoppers.