Mel's Blog

Thursday's bond market has opened in negative territory following another round of stock gains. The stock markets are continuing yesterday's rally with the Dow up 102 points and the Nasdaq up 37 points. The bond market is currently down 12/32, which will likely push this morning's mortgage rates higher.

The Labor Department gave us today's first economic report with the release of the 1st Quarter Employment Cost Index (ECI). It tracks employer costs for wages and benefits, showing a 0.3% increase during the quarter. This was lower than forecasts, which is good news for bonds, and was the lowest increase on record. However, the data seems to be ignored by traders this morning.

March's Personal Income & Outlays also showed weaker than expected results. It revealed a 0.3% decline in income and a 0.2% drop in spending. Both of these readings were a little weaker than analysts had expected, so the data can be considered favorable to bonds also. But this morning's stock gains have made it difficult for bonds to move higher.

The Labor Department also said that 631,000 new claims for unemployment benefits were filed last week. This was lower than forecasts, but since this data tracks only a week's worth of claims, it has had little impact on this morning's trading or mortgage rates.

                   Mel