Daily Market Update

Daily Market Commentary Today's Commentary
Updated on March 18, 2024 10:05:31 AM EDT Monday’s bond market has opened in negative territory with little to drive trading, leaving traders to anxiously await this week’s Fed news. Stocks are starting the week with early gains of 96 points in the Dow and 203 points in the Nasdaq. The bond market is currently down 3/32 (4.32%), but strength late Friday should keep this morning’s mortgage rates close to Friday’s early pricing.

There is nothing of relevance scheduled for today. The rest of the week has only three monthly economic reports and one potentially relevant Treasury auction. None of the economic releases are considered key or likely to be a market mover. What will draw the most attention is the second FOMC meeting of the year and its related events midweek.

We have two events tomorrow that we will be watching. First is February's Housing Starts report at 8:30 AM ET that is expected to show a large rise in new home groundbreakings. New home construction is an indicator of future sales of newly constructed homes and mortgage credit demand. This report usually does not draw a lot of attention, but can slightly affect rates if it reveals a sizable variance from forecasts. The lower the number of starts, the better the news for mortgage rates.

Next up are the results of tomorrow’s 20-year Treasury Bond auction at 1:00 PM ET. If the sale draws a strong demand from investors, we could see bonds improve during early afternoon trading, possibly leading to a slight downward revision to mortgage pricing. On the other hand, weak interest in the securities could cause an upward revision to rates tomorrow afternoon. Last week’s auctions drew mixed interest from investors, so this one could go either way.

Overall, Wednesday is the easy choice as the most important day for rates this week. With no major economic reports being released, the FOMC meeting is really the only scheduled event that has the potential to cause a significant change in rates. Friday looks to be the best candidate for calmest day. Any surprises having to do with the Fed’s timetable for lowering key rates could fuel a strong rally or sell-off in bonds, leading to a sizable change in mortgage rates. The rest of the week should yield only minor changes.


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