Wednesday’s bond market has opened in positive territory after the day off for Veteran’s Day. The stock markets are showing minor losses with the Dow down 33 points and the Nasdaq down 2 points The bond market is currently up 11/32 (2.32%), which should improve this morning’s mortgage rates by approximately .125 of a discount point from Monday’s pricing.
There is no relevant economic data being posted today, but we do have the first of this week’s two important Treasury auctions taking place. The 10-year Treasury Note sale is being held today while 30-year Bonds are tomorrow. Today’s auction is the more important of the two for mortgage rates as it will give us a better indication of demand for mortgage-related securities. If these sales are met with a strong demand from investors, we should see the bond market move higher during afternoon trading today and/or tomorrow. But a lackluster interest from buyers, particularly international investors, would indicate a waning appetite for longer-term U.S. securities and lead to broader bond selling. The selling in bonds will probably result in upward revisions to mortgage rates.
Results of today’s auction will be posted at 1:00 PM ET, so any reaction will come during early afternoon trading. Look for stocks to also influence bond trading and possibly mortgage rates later today. If the major indexes make a move much higher or lower than current levels, bonds and mortgage rates could be affected. This is especially true if the auction results fail to create a move.
Tomorrow’s only relevant data is last week’s unemployment figures at 8:30 AM ET. They are expected to show that 280,000 new claims for unemployment benefits were filed last week. This would be a slight increase from the previous week’s 278,000 initial claims. The larger the number of new claims, the better the news it is for mortgage rates as rising claims is a sign of employment sector weakness. However, because this report tracks only a single week’s worth of new claims, it usually takes a surprise spike or drop for it to noticeably affect mortgage rates.