There is no relevant economic data being released today. The stock selling and bond rally is due to weekend news that the coronavirus crisis is getting worse, not better. News that South Korea and Italy are experiencing a spike in cases has renewed fears about how the situation is going to impact the global economy. Some traders may have tried to convince themselves that it would be mostly isolated to China. However, the South Korea and Italy news this weekend has renewed the initial concerns the markets had when the virus first started making headlines. The fear is that it will have a noticeable negative impact on domestic and global economies. Weaker economic conditions make stocks less appealing to investors and causes funds to shift into bonds, lowering mortgage rates.
This rest of the week brings us the release of six monthly or quarterly economic reports in addition to a couple of Treasury auctions that have the potential to influence rates. None of the events are considered to be extremely important or possible market movers. Several of the reports do carry enough significance to cause a noticeable change in rates though. It will also be interesting to see just how long today's stock sell-off and bond rally will last.
February's Consumer Confidence Index (CCI) will be posted at 10:00 AM ET tomorrow morning. This Conference Board index measures consumer confidence in their personal financial situations, giving us a measurement of consumer willingness to spend. If consumers are feeling good about their own financial and employment situations, they are more apt to make large purchases in the near future. Since consumer spending makes up over two-thirds of the economy, related data is considered important in terms of gauging economic growth. It is expected to show an increase in confidence from the 131.6 reading in January to 132.0 this month. A lower reading would be considered good news for bonds and mortgage rates since it would indicate consumers are less likely to make a large purchase in the near future than many had thought.
Overall, it looked as if Thursday or Friday were the best candidates for most important day of the week for rates, but it is hard to believe that the economic data scheduled those days can cause the same type of movement in the markets we are seeing this morning. With the coronavirus back in the headlines and plenty of data scheduled this week, no day stands out as a possible quiet one for rates.
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