Thursday’s bond market has opened relatively flat despite unfavorable economic data and early stock gains. The Dow is currently up 180 points while the Nasdaq has gained 56 points. The bond market is currently down 1/32 (2.03%), which should keep this morning’s mortgage rates close to yesterday’s levels.
The first of today’s three economic releases was last week’s unemployment figures at 8:30 AM ET. They revealed that 259,000 new claims for unemployment benefits were filed last week, up from the previous week’s revised total of 256,000 initial claims. However, this was a little short of the 265,000 that was expected, indicating that the employment sector may have been stronger than many had thought last week. Therefore, we need to consider the news negative for bonds and mortgage rates. Fortunately though, this is only a weekly snapshot, so it has had little impact on today’s trading.
September’s Existing Home Sales data was posted at 10:00 AM ET. The National Association of Realtors of announced that home resales rose 4.7% last month, exceeding forecasts of a 1.5% increase. Because a strengthening housing sector makes broader economic growth more likely, this is also bad news for mortgage rates.
Lastly, September’s Leading Economic Indicators (LEI) was also released at 10:00 AM ET. The Conference Board said their LEI slipped 0.2% last month. Analysts were expecting to see a 0.1% decline. This is the bit of good news in today’s data because this index attempts to measure economic activity over the next several months. The decline means they are expecting to see little growth, which makes bonds more appealing to investors. However, this is a minor report and the variance was not enough to draw much attention.
Tomorrow doesn’t have anything scheduled that we need to be concerned about. Accordingly, the most likely influence on bond trading and mortgage rates will be stock movement. Generally speaking, stock gains usually pressure bonds and lead to higher mortgage rates. On the other hand, stock weakness often draws funds away from equities and into bonds. But it will probably be a fairly calm day for the mortgage market tomorrow.