With nothing in the way of new macro-economic data to guide them the few mortgage investors still at their desks appear to be taking their directional cues for mortgage interest rates from trading action in the stock market. In today's early going a solid rally in the stock market is exerting noticeable upward pressure on mortgage interest rats.
Evidently an increasing number of mortgage investors have begun factoring in the likelihood the economy is beginning to pick itself up off of the mat after being brought to its knees by the most severe recession since the Great Depression. Against this backdrop tomorrow's GDP report will likely invoke little, if any reaction from traders. The Existing and New Home Sales figures due on Tuesday and Wednesday respectively are also unlikely to trigger a Grinch like response from market participants.
The November personal income and spending report will be the "biggie of the week" with respect to economic news. Should Wednesday's core personal consumption expenditure index (a component of the November personal income and spending report) post a benevolent reading of +0.1% (as expected) - look for mortgage investors to do nothing more than make one more raid on the holiday goodies in the break-room -- before grabbing their coats and heading home to celebrate Christmas. The few traders that stay around until the final bell sounds at 2:00 p.m. ET will likely cover their few remaining open positions before the holiday break - which may just bring in enough buy orders to nudge mortgage prices a little higher. In my opinion, the chances remain pretty strong that last Friday's profit-taking sell-off in the mortgage market will continue for the first day or two of the week -- before showing a little potential rally on Wednesday and perhaps the half-day session of Thursday.
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