Gross Domestic Product (GDP)
Besides the 7-year Note auction, we also will get two pieces of economic data tomorrow. One of those releases, the initial reading of the 3rd Quarter Gross Domestic Product (GDP), is a major economic report. The 8:30 AM ET report is considered to be the benchmark measurement of economic growth because it is the total of all goods and services produced in the U.S. Accordingly, it is likely to have a big impact on the financial markets and mortgage pricing. There are three versions of this report, each a month apart. Tomorrow’s release is the first version and usually has the biggest influence on the markets. Current forecasts show the economy expanded at a 2.5% annual pace during the July through September months. If this report shows a noticeably smaller increase, I am expecting to see the bond market rally and mortgage rates fall further. However, a much larger than expected rise could lead to bond selling and an increase in mortgage pricing.