Monday’s bond market has opened flat, reversing pre-market opening gains. The stock markets looked like they were going to open in negative territory in reaction to news from Greece about a delay in their financial bailout. But the Dow is currently up 8 points while the Nasdaq has slipped 2 points. The bond market is currently up 1/32, which should keep this morning’s mortgage pricing at Friday’s level.
There is no relevant economic news scheduled for release today, so we can expect the stock markets to be the biggest influence on bond trading today. If the major indexes move higher this morning, bonds will likely suffer and mortgage rates will revise upward. We have already seen this pattern before the markets opened for regular trading today. With the yield on the benchmark 10-year Treasury Note below 3.00% again, I believe that there is more likelihood of it moving higher than there is it moving much lower, at least in the immediate future. Since mortgage rates tend to follow bond yields, this would be bad news for mortgage shoppers. Accordingly, please proceed cautiously if still floating an interest rate.
Tomorrow brings us the release of May’s Existing Home Sales report. The National Association of Realtors will give us figures on home resales late tomorrow morning. This data helps us measure housing sector strength and mortgage credit demand, but it usually takes a large variance from forecasts for it to cause a noticeable change to mortgage rates. It is expected to show a decline in home sales from April to May.
Overall, this will likely be a fairly active week for mortgage rates. Today will likely turn out to be one of the more quiet days of the week unless the stock markets stage a rally or sizable sell-off this afternoon. The most active should be Wednesday with the FOMC meeting adjourning or Friday due to the Durable Goods report being posted that day. Tomorrow’s news may also affect mortgage rates, but likely not as much as some of the other events scheduled this week.