Thursday’s bond market has opened in positive territory, extending yesterday’s late gains. The stock markets are flat with the Dow and Nasdaq both nearly unchanged from yesterday’s close. The bond market is currently up 8/32 (2.24%), which should improve this morning’s mortgage rates by a little more than .125 of a discount point if comparing to Wednesday’s morning’s rates.
Yesterday afternoon’s FOMC minutes didn’t reveal too many surprises but did seem to strengthen the likelihood the Fed will raise short-term interest rates at next month’s FOMC meeting. There was some discussion on verbiage of the post-meeting statement that a couple members felt would misrepresent their stance as being firm on making a move next month. We will get this month’s employment figures before that meeting, so they will be highly influential in the Fed’s decision that will come mid-month. Both the bond and stock markets reacted favorably after the minutes were released, leading to some minor lender rate improvements during afternoon trading.
This morning’s first report was last week’s unemployment figures at 8:30 AM ET that revealed 271,000 new claims for unemployment benefits were filed last week. This was a decline from the 276,000 of the previous week and just below forecasts of 272,000 initial claims, hinting that the employment sector strengthened slightly last week. Since it is only a weekly report and did not miss forecasts by much, we can consider this news neutral for the bond and mortgage markets.
At 10:00 AM ET this morning, the Conference Board posted their Leading Economic Indicators (LEI) for October. It showed a 0.6% rise, meaning the indicators are pointing towards economic growth over the next three to six months. That isn’t good news for bonds, but since it pegged forecasts and the report is not considered to be that important, it has had no influence on today’s mortgage pricing.
Tomorrow has nothing scheduled for release that is of relevance to the bond market or mortgage rates. We can expect stocks to have some impact on bond trading, but unless something unexpected happens it will probably be a pretty calm day in terms of movement in rates.