Today's Commentary

Updated on May 22, 2019 10:05:12 AM EDT
Wednesday’s bond market has opened in positive territory. The major stock indexes are showing moderate losses of 67 points in the Dow and 17 points in the Nasdaq. The bond market is currently up 8/32 (2.40%), which should improve this morning’s mortgage rates slightly if comparing to Tuesday’s morning pricing.

Today’s only mortgage-rate relevant event will come this afternoon when the Fed releases the minutes of their last FOMC meeting. Traders will be looking for how Fed members voted during the last meeting and any comments about inflation concerns or economic growth. The goal is to form opinions about the Fed's next move regarding interest rates. There is much debate in the markets whether or not the Fed will adjust key short-term rates. Since the minutes will be released at 2:00 PM ET, if there is a market reaction to them it will come during mid-afternoon trading.

Tomorrow has two minor pieces of data set for release. The first is last week’s unemployment figures at 8:30 AM ET. They are expected to show that 218,000 new claims for unemployment benefits were filed last week. Rising claims is a sign of employment sector weakness, so the higher the number tomorrow, the better the news it is for bonds and mortgage rates. However, because this is only a weekly snapshot, don’t expect mortgage rates to have a significant reaction.

The second release will be April's New Home Sales report at 10:00 AM ET . This data gives us a small measurement of housing sector strength and future mortgage credit demand but probably will not have much of an impact on mortgage pricing unless it shows a sizable variance from forecasts. Analysts are expecting to see a decline in sales from March's level, meaning the new home portion of the housing sector softened last month.


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