Monday Morning UpDate

By
Mortgage and Lending with Roxy Redenbaugh (Acceptance Capital Mortgage Corporation)

Monday's bond market has opened flat despite modest stock gains. The stock markets are starting the week in positive territory with the Dow up 25 points and the Nasdaq up 8 points. The bond market is nearly unchanged from Friday's close, which should keep this morning's mortgage rates close to Friday's levels.

There is no relevant economic data scheduled for release today, so look for the stock markets to be the cause of any afternoon revision to mortgage rates. If the major stock indexes move upward from current levels, we could see bonds weaken and mortgage rates increase later today. But if stocks move lower by a good margin, we should see mortgage pricing improve this afternoon.

The rest of the week brings us the release of five economic reports for the bond market to digest in addition to another FOMC meeting and two relevant Treasury auctions. It starts tomorrow morning when Employee Productivity and Costs data for the second quarter will be posted. It will give us an indication of employee output. High levels of productivity are believed to allow the economy to grow without fears of inflation. I don't see this being a big mover of mortgage pricing, but since it is the only data of the day it may influence rates slightly during morning trading. Analysts are currently expecting to see an increase in productivity of only 0.1%. A higher than expected reading could help improve bonds, leading to lower mortgage rates tomorrow.

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Roxy Redenbaugh

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