Treasury Auctions (5,7,10,30 year securities)
Tomorrow has no relevant economic data set for release, so we can expect stock movement to again heavily influence bond trading and mortgage pricing. What we do have tomorrow is the first of two relatively important Treasury auctions that may affect mortgage rates. There will be an auction of 5-year Treasury Notes tomorrow and 7-year Notes on Thursday. Neither of these sales will directly impact mortgage pricing, but they can influence general bond market sentiment. If the sales go poorly, we could see broader selling in the bond market that leads to upward revisions in mortgage rates. On the other hand, strong sales usually make government securities more attractive to investors and bring more funds into bonds. The buying of bonds that follows usually translates into lower mortgage rates. Results of the sales will be posted at 1:00 PM ET each auction day, so look for any reaction to come during afternoon hours.