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Market Comment
Mortgage bond prices rose last week helping mortgage interest rates fall. Weaker than expected industrial production data helped start the week on a positive note for lower rates. Retail sales rose 0.3%, weaker than the expected 0.5% increase and very bond friendly. We were very fortunate to have rates hold mid week despite higher than expected core inflation at the producer and consumer levels. Inflation readings finally started to show what most analysts and consumers have known for some time. Higher than expected jobless claims and weaker than expected leading economic indicators data Thursday kept rates moving in the right direction. Mortgage bonds ended the week positive by a favorable 1/2 of a discount point.
The Treasury will have another round of auctions this week. If demand falters rates could be adversely affected.
LOOKING AHEAD
|
Economic
Indicator
|
Release
Date & Time
|
Consensus
Estimate
|
Analysis
|
| President's Day |
Monday, Feb. 21 |
None |
Bond market closed in observance of President's day |
| Consumer Confidence |
Tuesday, Feb. 22,
10:00 am, et
|
63.0 |
Important. An indication of consumers' willingness to spend. Weakness may lead to lower mortgage rates. |
| 2-year Treasury Note Auction |
Tuesday, Feb. 22,
1:15 pm, et
|
None |
Important. $35 billion of notes will be auctioned. Strong demand may lead to lower mortgage rates. |
| 5-year Treasury Note Auction |
Wednesday, Feb. 23,
1:15 pm, et
|
None |
Important. $35 billion of notes will be auctioned. Strong demand may lead to lower mortgage rates. |
| Weekly Jobless Claims |
Thursday, Feb. 24,
8:30 am, et
|
410k |
Important. An indication of employment. Higher claims may result in lower rates. |
| Durable Goods Orders |
Thursday, Feb. 24,
8:30 am, et
|
Down 0.8% |
Important. An indication of the demand for "big ticket" items. Weakness may lead to lower rates. |
| New Home Sales |
Thursday, Feb. 24,
10:00 am, et
|
Up 1.9% |
Important. An indication of economic strength and credit demand. Weakness may lead to lower rates. |
| 7-year Treasury Note Auction |
Thursday, Feb. 24,
1:15 pm, et
|
None |
Important. $29 billion of notes will be auctioned. Strong demand may lead to lower mortgage rates. |
| Q4 GDP second estimate |
Friday, Feb. 25,
8:30 am, et
|
Up 3.3% |
Important. The aggregate measure of US economic production. Weakness may lead to lower rates. |
| U of Michigan Consumer Sentiment |
Friday, Feb. 25,
10:00 am, et
|
75 |
Important. An indication of consumers' willingness to spend. Weakness may lead to lower mortgage rates. |
Consumer Confidence
The Conference Board releases the Consumer Confidence Index on the last Tuesday of every month. The report details the levels of confidence individual households have in the performance of the economy. The data is derived from a survey of 5,000 households nationwide. The survey polls consumer opinions on current business conditions, their jobs, their incomes, and their future spending plans.
The consumer confidence index is significant in that it provides a precursor into consumers' willingness to spend in the months ahead. However, many analysts point out that willingness to spend does not always convert to actual expenditures
This week's release will be eagerly anticipated. Look for any variation from estimates to cause mortgage interest rate volatility. Signs of eroding consumer confidence could lead to improvements in mortgage interest rates. However, stronger than expected figures could spike rates higher.
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