Monday's bond market has opened in negative territory following early stock gains. The stock markets are starting the week off strong with the Dow up 235 and the Nasdaq up 52 points. The bond market is currently down 25/32, which will likely push this morning's mortgage rates higher.

There is no relevant economic news scheduled for release today. The rest of the week brings us the release of only two pieces of economic news in addition to the minutes from the last FOMC meeting. Neither of the economic reports can be considered of high importance to the markets and mortgage rates, so we may see a fairly calm week for mortgage rates.

Tomorrow's release of April's Housing Starts is the first data of the week but is the less important of the two. This data measures housing sector strength and mortgage credit demand by tracking new permits and actual starts of new home construction. It is expected to show a small increase in new starts from March's readings. But, since this report is not considered to be of high importance to the bond market, it likely will have little impact on mortgage rates unless it varies greatly from forecasts.

Overall, I think it will be a fairly calm week for mortgage rates, at least compared to last week. However, if the stock markets continue to rise, we may see bonds fall further and mortgage rates move higher the next few days.

Also worth noting is an early close in the bond market Friday afternoon ahead of the Memorial Day Holiday, Monday. These early closes sometimes lead to additional volatility in bond prices as investors prepare for the long weekend and trading thins with many traders starting the weekend early.

                   Mel