Market Commentary

Updated on April 21, 2021 10:04:16 AM EDT

This morning has no relevant economic data set for release. We do have the 20-year Treasury Note auction to watch this afternoon. Results will be posted at 1:00 PM ET, making this an early afternoon event for rates. These sales don't directly affect mortgage rates but can impact broader bond trading sentiment that indirectly can influence rates. A strong demand from investors could lead to bond gains and a minor improvement in mortgage pricing this afternoon.

Tomorrow makes up for the light calendar thus far this week with three economic reports for the markets to digest. The first will be last week's unemployment update at 8:30 AM ET. It is expected to show 600,000 new claims for unemployment benefits were filed last week, up from the previous week's 576,000. Rising claims is a sign of employment sector weakness. Accordingly, the higher the number of initial filings, the better the news it is for mortgage rates.

Next up is March's Existing Homes Sales numbers from the National Association of Realtors at 10:00 AM ET. This release gives us an indication of housing sector strength and mortgage credit demand. It can influence mortgage pricing if it shows a sizable variance from forecasts. Ideally, the bond market would like to see a large decline in home resales because a softening housing sector makes broader economic growth more difficult. Analysts are expecting to see a small decline in sales between February and March. The larger the decline, the better the news it is for bonds and mortgage rates.

Leading Economic Indicators (LEI) for March will also be posted at 10:00 AM ET tomorrow. This Conference Board index attempts to predict economic activity over the next three to six months. It is considered to be only a moderately important report, so at best we can expect to see a slight movement in rates as a result of this data. The report is expected to show a 0.6% rise from February's reading, indicating economic growth over the next several months. Favorable news for mortgage rates would be a weaker reading.

 ©Mortgage Commentary 2021

The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of Horizon Credit Union.