Updated on April 18, 2024 10:07:13 AM EDT

Yesterday's afternoon events gave us conflicting results. The 20-year Treasury Bond drew a strong demand from investors, allowing us to call the sale a success. A strong auction such as this indicates a decent appetite for longer-term securities. Since mortgage rates are set on long-term mortgage bonds, this is good news for rates. The 1:00 PM ET auction results announcement appear to have spurred yesterday's afternoon rally that eventually led to widespread intraday improvements to mortgage pricing.

The second afternoon event was the 2:00 PM ET release of the Fed Beige Book. It didn't give us any major surprises, but did reiterate conditions that are not favorable for bonds. For example, 10 of the Fed's 12 regions reported economic growth had gained momentum during the six-week period ending April 8th. The report also showed consumers continued to spend and that there was little sign of inflation easing. In short, there wasn't anything in the report that was particularly good news for the bond and mortgage markets. That said, it also failed to give us new information that was relevant enough to derail the bond rally that was already well underway.

The first of this morning's three economic releases was last week's unemployment figures at 8:30 AM ET. They revealed 212,000 new claims for unemployment benefits were made last week, matching the previous week's revised total. Forecasts had initial filings rising to 215,000, meaning we have to consider the release to be slightly negative for mortgage rates. This is because rising claims are a sign of weakness in the employment sector and the number came in lower than expected.

March's Existing Homes Sales report was posted at 10:00 AM ET. The National Association of Realtors announced a 4.3% decline in home resales, the first monthly drop since last December. A decline in sales is good news for bonds because it helps prevent broader economic growth. However, March's sales were a little stronger than expected. Accordingly, we are labeling the report neutral for mortgage rates.

This morning's favorable economic news came in March's Leading Economic Indicators (LEI) from the Conference Board. The LEI fell 0.3%, meaning the indicators are predicting slower economic activity over the next three to six months. Analysts predicted they would hold at February's levels. This allows the report to be good news for rates. Unfortunately, this report doesn't carry a high importance level in the markets, restricting the impact it can have on today's mortgage pricing.

Tomorrow doesn't have anything scheduled that we need to be concerned other than a Fed member speech at 10:30 AM ET. The lack of economic data allows traders to adjust holdings before the weekend after another volatile week in bonds. This may lead to a minor or moderate change in mortgage rates. Yesterday's nice rally gave us optimism that the negative momentum may be ending. Today's open contradicts that theory, but don't be surprised to see some strength late today that may extend into tomorrow's session.

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