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Monday's bond market has opened flat following a relative calm opening
in stocks. The stock markets are kicking the week off in positive ground
with the Dow up 23 points and the Nasdaq up 4 points. The bond market is
currently up 2/32, which should keep this morning's mortgage rates at
Friday's levels. However, I expect the stock market to be a little jumpy
this week and home loan rates are most likely to raise on any movement.
There is no relevant economic data scheduled for release today or
tomorrow, leaving bond prices and mortgage rates to the influence of the
stock markets. The rest of the week brings us the release of four pieces of
data and two relevant Treasury auctions. The most important news will be
posted late in the week, so we may see the most movement in rates during
those days.
The first report comes Wednesday afternoon when the Federal Reserve will
release its Beige Book. This data details economic conditions throughout the
U.S. by region. It is relied upon heavily by the Federal Reserve to
determine monetary policy during their FOMC meetings. If it shows
surprisingly softer economic activity, the bond market may thrive and
mortgage rates could drop shortly after the 2:00 PM ET release. If it
reveals signs of inflation growing, we could see mortgage rates revise
higher Wednesday afternoon.
Overall, it likely to be a fairly busy week for the financial
markets, but the most action will probably come in the latter days. I think
that Friday will be the single most important day of the week with Retail
Sales figures being posted, but as we have seen over the past couple of
weeks, we don't need significant news from economic reports for the markets
to move heavily and mortgage rates to change significantly.
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