Wednesday’s bond market has opened well in negative territory, continuing yesterday’s afternoon weakness. The stock markets are mixed with the Dow down 37 points and the Nasdaq up 13 points. The bond market is currently down 14/32 (1.82%), which with losses late yesterday should push this morning’s mortgage rates higher by approximately .250 of a discount point if comparing to Tuesday’s morning pricing. If your lender revised upward during afternoon hours yesterday, you likely will see less of an increase this morning.
There is nothing set for release this morning that was relevant to mortgage rates. We do have something to watch this afternoon though that can be a market mover or a non-factor. This would be the minutes of the last FOMC meeting. Market participants will be looking for how Fed members voted during the last meeting and any comments about inflation or concerns about economic growth. The goal is to form opinions about the Fed’s next move regarding interest rates, which is expected to happen a couple times before the end of the year. Since the minutes will be released at 2:00 PM ET, if there is a market reaction to them it will be evident during mid-afternoon trading.
Tomorrow’s has two minor pieces of data scheduled for release. Last week’s unemployment figures at 8:30 AM ET will be first. They are expected to show that 278,000 new claims for unemployment benefits were filed last week, down from the previous week’s 294,000. Rising initial claims are a sign of employment sector weakness, so the larger the number of claims, the better the news it is for mortgage rates. Although, because this is only a weekly reading we usually need to see a significant variance from forecasts for it to impact mortgage rates.
The second report of the day will be April’s Leading Economic Indicators (LEI) at 10:00 AM ET tomorrow. This Conference Board report attempts to predict economic activity over the next three to six months. It is expected to show a 0.3% increase from March’s reading, meaning that economic activity is likely to strengthen over the next few months. A decline would be good news for the bond market and mortgage rates, while a much larger increase could cause mortgage rates to inch higher.