Monday’s bond market has opened in positive territory. The major stock indexes are starting the week relatively flat with the Dow up 27 points and the Nasdaq up 2 points. The bond market is currently up 6/32 (2.25%), which should improve this morning’s mortgage rates slightly from Friday’s morning levels.
There is nothing of relevance scheduled for release today. The rest of the week has four economic reports scheduled that are relevant to mortgage rates in addition to the minutes from last month’s FOMC meeting. One of the reports is considered highly important to the bond market, so we may see a decent amount of movement in rates this week. This is especially true if stocks make a noticeable move higher or lower any particular day.
October’s Consumer Price Index (CPI) from the Labor Department will start the week’s calendar at 8:30 AM ET tomorrow. The CPI measures inflationary pressures at the consumer level of the economy and is one of the more important reports the bond market sees each month. If it reveals stronger than expected readings, indicating that inflationary pressures are rising at the consumer level, the bond market will probably react negatively and cause mortgage rates to move higher. Analysts are expecting to see a 0.2% rise in the overall reading and a 0.2% increase in the core data that excludes more volatile food and energy prices.
Also tomorrow morning will be the release of October’s Industrial Production data at 9:15 AM ET. It gives us a measurement of manufacturing sector strength by tracking output at U.S. factories, mines and utilities. It is expected to reveal a 0.1% increase in production, indicating little strength in the manufacturing sector. Stronger levels of production would be considered bad news for the bond market and mortgage rates, but this report is not expected to greatly influence the markets. Therefore, it will likely take a sizable variance from forecasts for it to have a noticeable impact on mortgage pricing.
Overall, the most active day of the week will probably be tomorrow or Wednesday with two reports being posted each day. The best candidate for calmest day in rates is Friday. Despite the fact this is not a particularly busy week, please maintain contact with your mortgage professional if floating an interest rate and closing in the near future as the markets can get active at any time.