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Market
Comment
Mortgage bond prices finished the week slightly higher lower which put a little downward pressure on rates. Rates worsened Monday morning, recovered Tuesday, traded back and forth mid-week, and finished on a positive note. The data was tame and generally helped rates improve. Weekly ADP employment was 19.75K vs 21K. Consumer prices fell 0.4% vs the expected 0.1% decline. The Core was unchanged vs up 0.2%. Year over year CPI rose 3.5% vs 3.8%. YOY Core rose 2.6% vs 2.8%. Producer prices fell 0.3% vs unchanged. The Core was up 0.2% vs up 0.4%. YOY PPI rose 5.5% vs 6.2%. YOY Core was up 4.7% vs 5.2%. Retail sales rose 0.2% as expected. Weekly jobless claims were 208K vs 217K. Philadelphia Fed was 41.4 vs 13. Mortgage interest rates finished the week better by approximately 1/8 of a discount point amid considerable volatility.
LOOKING
AHEAD
|
Economic
Indicator |
Release
Date &
Time |
Consensus
Estimate |
Analysis
|
| Leading Economic Indicators |
Monday, July 20,
10:00 am, et
|
Up 0.1%
|
Important. An indication of future economic activity. A smaller increase may lead to lower rates.
|
| Weekly ADP Employment |
Tuesday, July 21,
8:30 am, et
|
20K
|
Important. An indication of employment. Weakness may bring lower rates.
|
| 20-year Treasury Bond Auction |
Wednesday, July 22,
1:15 pm, et
|
None
|
Important. Bonds will be auctioned. Strong demand may lead to lower mortgage rates.
|
| Weekly Jobless Claims |
Thursday, July 23,
8:30 am, et
|
212K
|
Important. An indication of employment. Higher claims may result in lower rates.
|
| 10-year Treasury TIPS Auction |
Thursday, July 23,
1:15 pm, et
|
None
|
Important. TIPS will be auctioned. Strong demand may lead to lower mortgage rates.
|
| New Home Sales |
Friday, July 24,
10:00 am, et
|
580K
|
Important. An indication of economic strength and credit demand. Weakness may lead to lower rates.
|
New Home Sales
New Home Sales data is compiled monthly by the Department of Commerce’s Census Bureau and is gathered from builders throughout the country. The data represents new home sales for the nation as well as four areas of the country: the Northeast, the Midwest, the South, and the West. Information on the average price of a home, the number of homes for sale, and the supply of unsold homes are also provided.
The data is an important indicator which shows any strength or weakness in the housing sector. The housing sector is valuable because when consumer spending changes, it appears in this sector first. Consequently, a chain reaction typically occurs. A slowdown in new home sales tends to lead to a slowdown in housing starts, which will continue to affect other indicators possibly continuing the economic worries, as has been the recent concern of most everyone.
New Home Sales data is often volatile and difficult to predict. Most analysts look at a three-month average to see any trends in the growth rate. The data remains significant in showing the condition of housing.
Be cautious this week as fear and uncertainty continue to dominate US financial markets. Inflation fears remain elevated tied to the conflict in the Middle East. Tame inflation readings recently tempered fears a bit, but oil prices still shot higher and a resolution to the conflict remains elusive. All these factors can and will impact data and trading in the weeks and months ahead.
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