Wednesday’s bond market opened in negative territory, despite weaker than expected housing news. The major stock indexes fluctuated in early trading, but the Dow and Nasdaq are both currently showing a loss of approximately 10 points. The bond market is currently down 12/32, but we will still likely see a slight improvement in this morning’s mortgage pricing due to strength in bonds late yesterday.
The National Association of Realtors said late this morning that home resales fell 0.8% last month, indicating further housing sector weakness. Analysts were expecting an increase in sales, making this good news for the bond market and mortgage rates. Unfortunately, it appears that bond traders aren’t too impressed by the data.
Tomorrow has two economic reports scheduled for release, neither of which is considered to be highly important. The first will come at 8:30 AM ET when the Labor Department gives us last week’s unemployment figures. They are expected to announce that 411,000 new claims for unemployment benefits were filed last week. This would be an increase from the previous week, making it favorable news for the bond market and mortgage rates. The higher the number of new claims, the better the news for mortgage pricing. However, since this report tracks only a single week’s worth of initial claims, it likely will not heavily influence the markets or mortgage rates unless it shows a sizable drop or spike in new claims.
June's Leading Economic Indicators (LEI) will be posted at 10:00 AM tomorrow morning. This Conference Board index attempts to measure economic activity over the next three to six months. While it is not a factual report, it still is considered to be of moderate importance to the bond market. It is expected to show a 0.3% increase, meaning that we may see a gain in economic activity over the next few months. A smaller rise in the index, or better yet a decline, would be good news for the bond and mortgage markets.
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