This holiday-shortened trading week brings us the release of six monthly or quarterly economic reports. Only a couple of the reports being released are considered to be of high importance to the markets. With the Christmas holiday being observed during the week, we can expect very thin trading. This means that we may see a larger reaction than normal to some news because there will be fewer traders working and less transactions being made.
There is no relevant economic news scheduled for release tomorrow or Tuesday, so look for the stock markets to help drive bond trading and mortgage rates those days. Generally speaking, stock market strength should equate into bond weakness and higher mortgage rates. However, the light trading could allow some movement in the major stock indexes without heavily influencing bond trading and mortgage pricing.
Two of the week’s reports are scheduled for posting Wednesday. The first is the final revision to the 3rd Quarter GDP. I don’t think this data will have an impact on mortgage rates unless it varies greatly from its expected reading. Last month’s first revision showed that the economy expanded at a 2.5% annual pace during the quarter and this month’s revision is expected to show a small upward revision. A revision higher than the 2.7% rate that is expected would be considered bad news for bonds. But since this data is quite aged at this point I don’t think it will have much of an impact on mortgage rates Wednesday.