Weekly Market Outlook

[Adam in CO]

This week brings us the release of only three economic reports for the bond market to digest. However, two of the three will likely have little impact on mortgage rates. This will leave the bond market subject to oil prices, stock market gains or losses and geopolitical news several days of the week.

The first data of the week comes Wednesday morning, with the National Association of Realtors posting July?s Existing Home Sales data. This report and Thursday?s New Home Sales report are the least important releases of the week. They give us an indication of housing sector strength and mortgage credit demand. If they indicate that the housing sector is still rapidly weakening, it may help push bond prices higher and mortgage rates slightly lower. But, the reports usually don?t have enough influence to drastically affect mortgage rates.

The Commerce Department will post July?s Durable Goods Orders at 10:00 AM Thursday, giving us an important measure of manufacturing sector strength. This data tracks orders at U.S. factories for big ticket items, or products that are expected to last three or more years. A larger decline than the expected 0.2% drop would indicate that the manufacturing sector is weakening. This would be good news for bonds and should lead to lower mortgage rates.

Overall, look for Thursday to be the busiest day of the week. The rest of the week will likely be fairly calm. We may see more profit taking in the bond market as investors look to capture the profits from the recent bond rally. This may lead to upward pressure in bonds that could push mortgage rates higher.