Monday, January 24, 2011

Market UpDate W/ BOND Market UP Slightly from Friday

Monday’s bond market has opened up slightly despite a positive open in stocks. The stock markets are showing relatively minor gains with the Dow up 33 points and the Nasdaq up 2 points. The bond market is currently up 2/32, which with Friday’s late strength should improve this morning’s mortgage rates by approximately .125 - .250 of a discount point compared to Friday’s morning pricing.

There is no relevant economic data scheduled for release today, so expect a relatively calm day for mortgage rates unless the major stock indexes move significantly higher or lower than their current levels. The rest of the week is quite busy with seven economic releases scheduled in addition to the first Federal Open Market Committee (FOMC) meeting of the year and two potentially influential Treasury auctions. All but one of them is considered to be of moderate or high importance, meaning we should see quite a bit of movement in mortgage rates the re st of the week.
January's Consumer Confidence Index (CCI) will be posted late tomorrow morning. This report is considered to be of moderate to high importance to the bond market and therefore can move mortgage rates. It is an indicator of consumer sentiment, which is important because waning confidence in their own financial situations usually means that consumers are less willing to make large purchases in the near future. Since consumer spending makes up two-thirds of the U.S. economy, market participants are very attentive to related data. Analysts are expecting to see an increase from December’s reading, indicating a higher level of consumer confidence. A reading much smaller than the expected 53.5 would be ideal for the bond market and mortgage rates.

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