MARKET NEWS

Wednesday's bond market has opened in positive territory due to early stock weakness. The stock markets are showing moderate losses with the Dow down 61 points and the Nasdaq down 18 points. The bond market is currently up 8/32, which will likely improve this morning's mortgage rates by approximately .125 of a discount point.

There is no relevant economic data being released today, so look for any intra-day changes to mortgage rates to come from movement in stocks. If the major indexes remain near current levels, the bond market and mortgage pricing will likely follow suit. However, a sizable move upward or downward in stocks will probably lead to bonds moving in the opposite direction and a potential revision to rates later today.

Worth noting is news from Italy that surprisingly didn't get much attention this morning. Italy's debt crisis appears to be easing somewhat, most recently hinted by two debt auctions that drew much lower interest rates. The interest rate Italy has to pay on one of them was cut in half from last month's similar auction. If that trend continues, the issue may become less of a threat to the global economy. That would be good news for stocks and bad news for bonds here in the U.S. It is too soon to tell if the downward movement in borrowing rates over there is actually a trend or just a blip. But if they do continue to move noticeably lower, we could see our stock markets strengthen, pushing bonds lower and mortgage rates higher.

The Labor Department will give us their weekly unemployment update early tomorrow morning. They are expected to say that 368,000 new claims for unemployment benefits were filed last week, which would be an increase from the previous week. We usually don't worry too much about this data because it tracks only a single week's worth of new claims, but we should probably pay a little more attention to this particular release as it could impact mortgage rates a bit more than usual due to the thin trading.