Market Commentary

Updated on October 19, 2021 10:06:56 AM EDT

Today's only relevant economic data was September's Housing Starts report at 8:30 AM ET. It showed that new home groundbreakings fell 1.6% last month while newly issued permits (a sign of future groundbreakings) fell 7.7%. Both readings were weaker than expected, signaling softness in the new home portion of the housing sector. Weaker housing data is good news for rates because it helps limit broader economic growth. Unfortunately, this report is considered to be of low importance to the bond market, preventing more of an impact on today's rates.

Tomorrow doesn't have any morning economic releases we need to be concerned with, but there are two afternoon events that may cause a change in rates. First is the 20-year Treasury Note auction that has the potential to influence mortgage rates. If this sale is met with a strong demand from investors, particularly international buyers, bond prices may rise during afternoon trading. This could lead to an improvement in mortgage rates shortly after the results of the sale are posted at 1:00 PM ET. On the other hand, a lackluster interest in the securities may create selling in the broader bond market and lead to a slight upward revision to mortgage rates tomorrow afternoon.

The Federal Reserve's Beige Book report that summarizes economic activity through the eyes of business contacts within each Fed region is the second release. The Fed relies heavily on this data during their FOMC meetings when making monetary policy decisions, so look for a potential reaction during mid-afternoon afternoon trading. It probably will not cause a major sell off in the stock or bond markets, but the 2:00 PM ET release is still worth watching as it could draw enough of a reaction to change rates slightly.

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