ECONOMIC UPDATE

POSSIBLE END TO THE GOVERNMENT SHUTDOWN, PLUS DELUGE OF GOVERNMENT BONDS.

Stocks are set to open the week higher, and bonds opened sharply lower on Monday on hopes that the government shutdown will end soon. Over the weekend, the Senate voted 60-40 on a bill to end the shutdown. However, there are still procedural snags that could derail the bill because it still needs amendments in the Senate, and it still needs to pass the House. As with most things in Washington, nothing is certain until it's certain. And, as with most things on Wall Street, rumors are enough to trigger sell-offs and rebounds. It seems like stocks are looking for an excuse to rebound after their recent pullback. Being that stocks and bonds compete for the same investment dollar, it seems like stocks may benefit from a possible end to the shutdown, and bonds may suffer. This may cause mortgage pricing to get worse.

Meanwhile, the US Treasury is set to auction $58 billion of 3-year Treasury notes on Monday, $42 billion of 10-year Treasury notes on Wednesday, and $25 billion of 30-year Treasury bonds on Friday. This deluge of government bonds will likely put negative pricing pressure on the overall bond market, including mortgage bonds. The US bond market is closed on Tuesday for Veterans Day. 

THIS WEEK'S ECONOMIC CALENDAR.

Here are the economic reports that may impact mortgage rates this week:

*Data subject to delay due to government shutdown.