Mortgage interest rates moved fractionally higher this morning after a report from the Labor Department showed a larger-than-expected drop in the weekly jobless claims number and as stock prices bounced higher on Wells Fargo's upbeat quarterly earnings report. Mortgage interest rates are also feeling some upward pressure as Uncle Sam thrashes around in the credit market this morning looking to borrow $18 billion in the form of 10-year notes. The credit markets will close early ahead of the Good Friday Holiday which many suspect leaves trading levels thin in the face of this sizeable amount of supply from the Treasury. The Treasury auction will conclude at 11:30 a.m. ET and I'll provide details on my website as soon as possible thereafter.
Next week's economic calendar offers an Easter basket brimming with data - ranging from Monday's Producer Price Index and Retail Sales figures for March through last month's Housing Starts and Building Permits numbers on Thursday. The big chocolate bunny in the middle will be the official start of quarterly earnings season for corporate America. Earnings are expected to fall - but the magnitude of the declines will make all the difference for the trend trajectory of mortgage interest rates. Better-than-expected earnings, especially from banks, will tend to drive stock prices and mortgage interest rates higher. Earnings that generally match or fall below investors' anticipated levels will likely be supportive of steady to fractionally lower mortgage interest rates. It is a close call - but by the end of the week look for stock prices to be sliding lower to the direct benefit of steady to higher mortgage interest rates.
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