Updated on January 27, 2021 10:04:56 AM EST

Yesterday’s 5-year Treasury Note auction did not draw a strong demand. The benchmarks used to gauge investor interest in the securities showed a below average demand. Fortunately, the results did not derail the afternoon rally in bonds that led to some lenders making an intraday improvement to rates. We have the 7-year Note auction to deal with tomorrow, but day one of this two-day auction cycle usually has the larger impact on rates. Results of tomorrow’s sale will be posted at 1:00 PM ET, meaning it will be an afternoon event to watch.

December’s Durable Goods Orders report was released at 8:30 AM ET this morning, revealing a 0.2% rise in new orders for big-ticket products such as airplanes, appliances and electronics. This was weaker than the 0.9% increase that was expected, but the size of the variance isn’t as important in this report as it is in others. That is because this data is known to be quite volatile from month to month, meaning large swings are common. Still, we can consider the data slightly favorable for mortgage rates as it indicates weaker than forecasted manufacturing activity.

This week’s FOMC meeting will adjourn at 2:00 PM ET today. It is extremely unlikely the Fed will alter key short-term interest rates at this time. Traders will be looking at the post-meeting statement for changes in the Fed’s future plans, particularly regarding their bond buying program and potential inflation concerns. The meeting will be followed by a press conference with Chairman Powell at 2:30 PM ET but does not include revised economic projections. This is an afternoon event that could have a big impact on the financial and mortgage markets if there are any surprises.

Tomorrow has several reports set for release, including the highly important initial GDP reading. Those reports will be covered in this afternoon’s update that will be posted shortly after the markets have an opportunity to react to the FOMC events.

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