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Monday's bond market has opened in negative territory following a
relatively strong opening in stocks. The stock markets are kicking the week
off with the Dow up 63 points and the Nasdaq up 24 points. The bond market
is currently down 20/32, but we will likely still see a slight improvement
in this morning's mortgage rates due to strength late Friday.
There is no relevant economic data being posted today or tomorrow, so
look for any further changes in mortgage rates to come as a result of
changes in the stock markets. If the stock markets remain near current
levels, mortgage rates should follow suit. If the major stock indexes
extend their current gains, mortgage rates could move higher this afternoon
and tomorrow.
The rest of the week is fairly busy with five economic reports scheduled
for release, but they are all being posted over two days. Two of the five
are considered to be of high importance to the markets and mortgage rates.
The remaining three are of interest to the markets but likely will not cause
a large change in mortgage rates unless they vary greatly from forecasts.
Wednesday brings us the release of three reports that are relevant to
mortgage rates. The day's reports are a broad spectrum of data ranging from
housing figures to manufacturing output to an important inflation reading.
Their importance to the markets also is a wide variety. The first report of
the day is May's Housing Starts that tracks starts of new home projects. The
second is May's Producer Price Index (PPI) that gives us a very important
measurement of inflationary pressures at the producer level of the economy.
And the third is May's Industrial Production that helps us track
manufacturing sector strength.
Overall, look for Wednesday to be the biggest day of the week. Not just
because it brings the release of three of the five reports, but also because
it brings us the PPI that is considered to be a key inflation reading.
Thursday is also very important with the CPI being posted, so look for the
most movement in rates during the middle part of the week.
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