Market Commentary

Updated on April 24, 2019 10:45:06 AM EDT

There is nothing of relevance set for release this morning. However, we do have an afternoon event to watch in the 5-year Treasury Note auction. These types of sales don't directly impact mortgage pricing, but they can influence general bond market sentiment. If the sales go poorly, we could see broader selling in the bond market that leads to upward revisions in mortgage rates. On the other hand, strong sales usually make government securities more attractive to investors and bring more funds into bonds. The buying of bonds that follows often translates into lower mortgage rates. Results of the sales are usually posted at 1:00 PM ET each auction day, so look for any reaction to come during early afternoon hours.

Besides the 7-year Note auction and weekly unemployment figures, we will also get an important economic release tomorrow morning. March's Durable Goods Orders will be released by the Commerce Department at 8:30 AM ET tomorrow. This report gives us an indication of manufacturing sector strength by tracking orders for big-ticket items at U.S. factories. These are products that are expected to last three or more years, such as appliances, electronics and airplanes. Current forecasts are calling for an increase in new orders of 0.9%. This would be a sign of manufacturing sector strength, but this data can be quite volatile from month-to-month. Therefore, a small variance between forecasts and the actual results will not heavily influence the markets or mortgage rates. A large decline would be considered good news for mortgage pricing, while a much larger rise would indicate strength in the sector. A sign of solid manufacturing growth could lead to higher mortgage rates tomorrow.

 ©Mortgage Commentary 2019