Monday’s bond market has opened in positive territory as last week’s late strength extends into this morning’s trading. The stock markets are doing their part but showing losses rather than gains with the Dow down 38 points and the Nasdaq down 5 points. The bond market is currently up 14/32, which with Friday’s afternoon strength should improve this morning’s mortgage rates by approximately .625 - .750 of a discount point.
There is no relevant economic news scheduled for release today or tomorrow. This means we can look towards the stock markets for direction in bond trading and mortgage rates. If the major stock indexes move higher, we could see pressure in bonds and mortgage rates. Ideally, we would like to see stock weakness that helps boost bond prices and improve mortgage pricing.
This holiday-shortened trading week brings us the release of six monthly or quarterly economic reports, all being posted Wednesday and Thursday. Only a couple of the reports being released are considered to be of high importance to the markets. With the Christmas holiday being observed this 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.