MARKET NEWS

Wednesday's bond market has opened in positive territory for a change, due to early stock weakness. The stock markets are reacting negatively to news from Europe that raises concerns about the possibility of the region solving its financial crisis. The Dow is currently down 68 points while the Nasdaq has lost 34 points. The bond market is currently up 9/32, which should improve this morning's mortgage rates by approximately .125 of a discount point.

There is no relevant economic data being posted today. This means we can expect any intra-day changes in mortgage rates to come as a result of significant movement in stocks. If the major stock indexes move noticeably lower from current levels, we could see funds shifted back into bonds. That could lead to intra-day improvements to mortgage rates. On the other hand, a rebound in stocks could pressure bonds back into negative territory and lead to an upward revision to rates later today.

Tomorrow's only economic data is the Labor Department's weekly update on unemployment claims. They will announce last week's figures early tomorrow morning, giving us a small picture of employment sector strength or weakness. Analysts are expecting to hear that 395,000 new claims for unemployment benefits were filed last week. This would be a decline from the previous week's 402,000 new claims, hinting at sector strength. However, since this data tracks only a single week's worth of new claims, it usually has a minimal impact on bond trading and mortgage rates unless it shows a sizable variance from forecasts.

I am expecting to see a quiet day in the mortgage market. In fact, with nothing to drive bond trading today and only minor or moderately important economic data the last two days, we will likely see little movement in mortgage rates the remainder of the week. There are two reports scheduled for release Friday morning, but neither is considered to be highly important. Therefore, I believe we may see a slight change in pricing after they are posted Friday, but there is nothing scheduled that brings much concern.