Updated on April 26, 2017 10:28:59 AM EDT
There is nothing scheduled for release today in terms of economic data that is expected to affect mortgage rates. We do have the first of this week’s two relatively important Treasury auctions taking place that may affect mortgage rates though. There will be an auction of 5-year Treasury Notes today and 7-year Notes on tomorrow. Neither of these sales will directly impact mortgage pricing, but they can influence general bond market sentiment. If the sales go poorly, we could see broader selling in the bond market that leads to upward revisions in mortgage rates. On the other hand, strong sales usually make government securities more attractive to investors and bring more funds into bonds. The buying of bonds that follows usually translates into lower mortgage rates. Results of the sales will be posted at 1:00 PM ET each auction day, so look for any reaction to come during afternoon hours.
Tomorrow has two pieces of economic data set for release at 8:30 AM ET. One of those reports is much more important to the markets than the other. That would be Marchs Durable Goods Orders. This report gives us an indication of manufacturing sector strength by tracking orders for big-ticket items at U.S. factories. These are products that are expected to last three or more years, such as appliances, electronics and airplanes. Current forecasts are calling for an increase in new orders of 1.2%. This would be a sign of manufacturing sector strength, but this data can be quite volatile from month-to-month. Therefore, a small variance between forecasts and the actual results will not heavily influence the markets or mortgage rates. A large decline would be considered good news for mortgage pricing, while a large rise would indicate strength in the sector. A sign of solid manufacturing growth could lead to higher mortgage rates tomorrow.
Also early tomorrow morning will be last week’s unemployment update. This report is expected to show that 242,000 new claims for unemployment benefits were filed last week, down slightly from the previous week’s 244,000. Rising initial claims are a sign of employment sector weakness, so the larger the number of claims, the better the news it is for mortgage rates. Although, because this is only a weekly reading we usually need to see a significant variance from forecasts for it to impact mortgage rates.
©Mortgage Commentary 2017