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Tuesday's bond market has opened up slightly despite sizable stock gains. The stock markets are kicking the week off with a post-holiday rally that has the Dow up 128 points and the Nasdaq up 34 points. The bond market is currently up 3/32, which should keep this morning's mortgage rates at Friday's levels.
The Institute for Supply Management (ISM) reported late this morning that their service sector index fell to 53.8 last month, down from 55.4 in May. Analysts were expecting to see a reading of 55.0, meaning that more surveyed businesses in the service sector felt business worsened during the month than last month. This is basically good news for the bond market and mortgage rates, but it was not enough of a variance from forecasts to have an impact on this morning's mortgage pricing.
The rest of the week is extremely light in terms of relevant economic reports or events that may affect mortgage rates. The only other economic data worth mentioning is Thursday's weekly unemployment figures from the Labor Department. This release usually has little influence on bond trading or mortgage rates, but with a lack of important data scheduled for release this week it may draw more attention than usual. Analysts are expecting to see that approximately 460,000 new claims for benefits were filed last week. The higher the total of new claims, the better the news for bonds and mortgage rates.
Keep in mind that all the Markets are very nervous and it will not take much news to have home loan rates rise. Though the housing start data, foreclosure numbers and overall economy are all pressuring to help keep home loan rates down... there is little room for them to drop and a lot of room for them to go up .....soon!
Some source information by www.mortgagecommentary.com and Kent Friend.
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