Mortgage Market Update
Monday’s bond market has opened in negative territory despite weaker than expected results in some highly important economic data. The stock markets are starting the week with minor losses. The Dow is currently down 18 points while the Nasdaq has lost 23 points. The bond market is currently down 11/32 (2.49%), but due to strength late Friday, we should see little change in this morning’s mortgage rates if comparing to Friday’s early pricing. Today’s only relevant economic data was posted late this morning by the Institute for Supply Management (ISM). They announced at 10:00 AM ET that their manufacturing index for May stood at 53.2. This was below forecasts of 55.6 and a decline from April’s 54.9, indicating that manufacturer sentiment weakened last month. That is a sign of manufacturing sector weakness, making the data good news for the bond market and mortgage rates. However, bond traders apparently weren’t too impressed with the news because bonds are trading very close to where they were right before the report was posted. Tomorrow has April’s Factory Orders being posted at 10:00 AM ET. This Commerce Department report is similar to last week's Durable Goods Orders release, but also includes new orders for non-durable goods. It can cause some movement in the financial markets if it varies from forecasts by a wide margin, but it isn't expected to cause much of a change in rates this month. Current forecasts are calling for an increase in orders of 0.5%. The weaker the reading, the better the news it is for the bond market and mortgage rates. Overall, it appears that Friday is the key day of the week with regards to mortgage rate movement although Wednesday could also be active for mortgage pricing. Tomorrow or Thursday will probably be the lightest day unless something totally unexpected happens with stocks.