Mel's Blog

Friday's bond market has opened in positive territory as investors digest the week's events. The stock markets are showing gains with the Dow up 6 points and the Nasdaq up 22 points. The bond market is currently up 38 basis points, but we will still see an increase in this morning's mortgage rates because we only recovered a third of yesterday’s sell off. There is no relevant economic data scheduled for release today. This makes it likely that bonds will be influenced mostly by changes in the stock markets today. As long as the major stock indexes remain calm, I would expect bonds and mortgage rates to follow suit. If the stock markets give back this morning's gains, bonds may react favorably as the day goes on. However, afternoon weakness seems to be routine lately so we should go into the weekend with a cautious approach. Next week is fairly active in terms of economic releases. There are several scheduled for release that may influence mortgage pricing, but we also have an FOMC meeting on the calendar next week. In addition to those items, there is another round of Treasury auctions on the agenda that may also affect bond trading and mortgage rates. None of the economic data or relevant events take place on Monday, so look for it to be a day of preparation for the week's events.