Friday's bond market has opened in negative territory following a stronger than expected consumer sentiment report and an uneventful morning in stocks. The stock markets are mixed with the Dow up 18 points and the Nasdaq up 1 point. The bond market is currently down 16/32, which will likely push this morning's mortgage rates higher.

Today's only relevant economic news was the University of Michigan's Index of Consumer Sentiment for April. It was expected to show a reading of 58.5, but today's release revealed a reading of 61.9. While this is not a figure that is likely to drastically move the markets, it does indicate that consumers are more optimistic about their own financial situations than some had thought. That can be considered a negative for bonds because it is believed to mean that consumers are more apt to make large purchases in the near future.

Fed Chairman Bernanke will be making a speech today, but it is not likely to affect the markets or mortgage rates. There is no Q & A scheduled following the speech and I doubt the prepared text will say anything that will be of much interest to the markets.

Next week is fairly light in terms of economic releases. It does bring us a handful of reports but only one can be considered of high importance. The two housing reports may create some interest if they show an unexpected rise in new and existing home sales, but this week's data was clearly more important to the market and mortgage rates.

Unlike many, there is data for release this Monday. March's Leading Economic Indicators (LEI) will be posted late Monday morning. It attempts to predict economic activity over the next three to six months, but is thought of as only a moderately important report.

                    Mel

Tuesday's bond market has opened in negative territory after this morning's only relevant economic data revealed a much stronger than expected reading. The stock markets are showing modest loses with the Dow down 8 points and the Nasdaq down 6 points. The bond market is currently down 22/32.

The Conference Board reported late this morning that their Consumer Confidence Index (CCI) for April jumped to 39.2. This is a six-month high for the index and a much stronger reading than the 28.8 that was expected. That indicates that consumers were much more optimistic about their own personal financial situations than many had thought. The negative impact on bonds comes from the belief that higher levels of confidence makes it much more likely that consumers will make larger purchases in the near future. And since consumer spending makes up two-thirds of the U.S. economy, any related data is considered important and can influence bond trading.

Tomorrow is going to be a pretty interesting day. We have the possibility of seeing plenty of volatility in the markets and therefore, mortgage rates also. The first event is the release of the preliminary version of the 1st Quarter Gross Domestic Product (GDP). This is arguably the single most important report that we see on a regular basis. The GDP is the sum of all products and services produced in the U.S. and is considered to be the best indicator of economic growth or contraction. I expect this report to cause major movement in the financial markets tomorrow morning. Analysts are expecting to see a decline in output at an annual rate of 4.9%. A larger decline would be ideal for mortgage rates. But, a stronger than expected reading would almost certainly cause stock prices to rise and bond prices to fall, leading to higher mortgage rates tomorrow morning.

This week's FOMC meeting begins today and will adjourn tomorrow afternoon. It will likely adjourn with an announcement of no change to key short-term interest rates, but we may see some volatility in the markets following the 2:15 PM ET post-meeting statement.

With the preliminary version of the GDP being released during morning trading and the FOMC meeting adjourning during afternoon hours, there is a decent possibility of the markets changing directions more than once tomorrow.

                   Mel

This week is fairly light in terms of economic news scheduled for release. There are four reports scheduled, but only one of them is likely to cause much movement in mortgage rates. Accordingly, there is a fairly decent possibility of seeing a fairly calm week in the mortgage market, assuming that the stock markets do the same.

The week's first data comes tomorrow morning when the Conference Board will release their Leading Economic Indicators (LEI) for March. This data attempts to measure economic activity over the next three to six months. If it estimates an increase in activity, the bond market may fall and mortgage rates could rise. If it shows a weaker than expected reading, the bond market may move higher and mortgage rates should improve slightly. This is considered to be a moderately important report, so we may see a slight movement in rates as a result of this report. It is expected to show a decline of 0.3%.

There is no relevant data scheduled for release Tuesday or Wednesday. The National Association of Realtors will post March's Existing Homes Sales numbers Thursday morning, which are expected to show a drop from February. A similar report to this one and actually the week's least important data- March's New Home Sales will be released Friday morning. Both of these releases give us an indication of housing sector strength and mortgage credit demand, but unless they vary greatly from analysts' forecasts, I don't think they will cause much movement in mortgage rates.

March's Durable Goods Orders will also be posted Friday morning. This report gives us an indication of manufacturing sector strength by tracking orders for big-ticket items at U.S. factories. Current forecasts are calling for a decline of 1.5%. This would be a sign of manufacturing sector weakness that would be good news for bonds, especially if the report shows a larger than expected decline. A stronger level of new orders could lead to stock strength and weakness in bonds, translating into higher mortgage rates Friday.

Overall, look for Friday to be the most important day of the week with the Durable Goods report being posted. The rest of the week will likely be heavily influenced by the stock markets. If the major stock indexes rally, bonds will likely suffer and mortgage rates will move higher. If stocks fall for the week, we could see mortgage rates move lower the next few days.

                   Mel

Friday's bond market is in negative territory again despite news of a 25-year high unemployment rate. The stock markets are also showing losses with the Dow down 52 points and the Nasdaq down 5 points. The bond market is currently down 20/32, but we will still see an improvement of approximately .125 in this morning's mortgage rates as a result of strength late yesterday. However, I would not be surprised to see an upward revision to rates later today if the bond market remain near current levels or fall further.

The Labor Department announced this morning that the U.S. unemployment rate rose to 8.5% last month, its highest level since November 1983. The payroll reading of today's report showed similar results with 663,000 jobs lost during the month. That figure put us above 2 million jobs lost so far this year. To put that figure in perspective, if the year ended last week, this would have been the fourth worst year on record in job losses. Unfortunately, we still have three quarters of the year to go.

The bad news for bonds is that this morning's figures nearly matched forecasts. The lack of weaker than expected figures has made bonds less appealing this morning. At least we did not get stronger than expected numbers or we may have seen a sizable bond sell-off. Still, I think there is a pretty good possibility of getting an upward revision to rates sometime today unless bonds can rebound.

Next week is very light in terms of economic data, therefore, there is little news to drive bond prices higher or mortgage rates lower. If the stock markets retreat, bonds may come into favor with traders, but without something to fuel bond buying I don't think we can see much of an improvement in mortgage rates.

                   Mel

Thursday's bond market has opened well in negative territory, mostly as a result of strong stock gains. The stock markets are rallying during early trading with the Dow currently up 260 points, crossing the 6,000 threshold, while the Nasdaq is up 60 points. The bond market is currently down 25/32, which will likely push this morning's mortgage rates higher.

This morning's economic data gave us mixed results with February's Factory Orders report showing a larger than expected jump in new orders. The 1.8% rise exceeded forecasts of a 1.5% increase in new orders, but this data is not important enough to fuel this type of reaction in the markets.

Today's second report was weekly employment figures from the Labor Department, who announced that 669,000 new claims for benefits were filed last week. This was more than what analysts had expected, but because this data is considered to be of low importance since it tracks only weekly claims, its results have had little influence on trading or mortgage rates.

Today's selling in bonds can be attributed to a "flight from safety" that is drawing funds from bonds into stocks. This comes as little surprise as investors look for the bottom in the stock market. We need to be careful because much of the recent rally in bonds came from investors who sold stocks and shifted funds into bonds. If the stock markets continue to rise, we may see more selling of bonds, leading to higher mortgage rates. However, this does not necessarily mean that rates will continue to move higher or that the bear market in stocks is over. It simply means we need to be very attentive to day-to-day movements. The short-term outlook could be negative for bonds, hence the lock recommendation over the past few days. But in my opinion, there is still room for rates to move lower over the longer-term.

The Labor Department will post March's Employment report tomorrow morning, giving us the U.S. unemployment rate and the number of jobs added or lost during the month. This is an extremely important report to the financial and mortgage markets and can heavily influence rates. It is expected to show an increase in the unemployment rate from February's 8.1% to 8.5% and that approximately 658,000 payrolls were lost during the month. A higher unemployment rate and a larger number of lost jobs would be good news for bonds and would likely push mortgage rates lower tomorrow.

Mel

Wednesday's bond market has opened flat after this morning's economic data failed to move the markets. The stock markets are showing early gains with the Dow up 80 points and the Nasdaq up 13 points. The bond market is currently up 3/32.

The Institute for Supply Management (ISM) said late this morning that their manufacturing index rose from 35.8 in February to 36.3 in March. This means that manufacturer sentiment rose slightly more than what analysts had expected. However, the difference was not sufficient enough to really hurt mortgage rates this morning.

Tomorrow morning we will see February's Factory Orders data. This data gives us an indication of manufacturing sector strength, but is considered moderately important. It is expected to show a 1.4% rise in new orders according to new forecasts. A smaller increase would be good news for bonds and mortgage rates while a larger rise could push mortgage pricing slightly higher tomorrow.

The Labor Department will be giving us weekly unemployment figures tomorrow morning. These weekly figures usually have little influence on rates, but with Friday's big monthly employment report the following day, tomorrow’s numbers may influence trading if they vary much from forecasts. I don't expect this release to create a significant movement in the markets or rates, but may influence them slightly more than usual. Analysts are predicting that 650,000 new claims for benefits were filed last week.

                   Mel