|
Market
Comment
Mortgage bond prices finished the week a little higher which put some downward pressure on rates. Rates improved considerably Monday, were flat mid-week, and worsened Thursday afternoon and Friday. The rally was fueled by a memorandum of understanding between the U.S. and Iran. Trading in response to the Fed meeting Wednesday afternoon erased most of the earlier improvements. The data was generally tame. Industrial production rose 0.1% vs 0.3%. Capacity use was 76.2% as expected. NAHB housing was 35 vs 36. Housing starts were 1.177M vs 1.43M. Retail sales rose 0.9% vs 0.5%. Weekly jobless claims were 226K vs 225K. LEI rose 0.1% as expected. Mortgage interest rates finished the week better by approximately 1/8 of a discount point despite considerable volatility throughout the week.
LOOKING
AHEAD
|
Economic
Indicator |
Release
Date &
Time |
Consensus
Estimate |
Analysis
|
| Weekly ADP Employment |
Tuesday, June 23,
8:30 am, et
|
25K
|
Important. An indication of employment. Weakness may bring lower rates.
|
| New Home Sales |
Wednesday, June 24,
10:00 am, et
|
640K
|
Important. An indication of economic strength and credit demand. Weakness may lead to lower rates.
|
| Durable Goods Orders |
Thursday, June 25,
8:30 am, et
|
Up 2.2%
|
Very important. The aggregate measure of US economic production. Weakness may lead to lower rates.
|
| Q1 GDP |
Thursday, June 25,
8:30 am, et
|
Up 1.6%
|
Very important. The aggregate measure of US economic production. Weakness may lead to lower rates.
|
| Personal Income and Outlays |
Thursday, June 25,
8:30 am, et
|
Up 0.1%,
Up 0.5%
|
Important. A measure of consumers’ ability to spend. Weakness may lead to lower mortgage rates.
|
| PCE Core Inflation |
Thursday, June 25,
8:30 am, et
|
Up 0.3%
|
Important. A measure of price increases for all domestic personal consumption. Weaker figure may help rates improve.
|
| U of Michigan Consumer Sentiment |
Friday, June 26,
10:00 am, et
|
48.9
|
Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates.
|
Warsh Makes Changes
The new Chairman of the Federal Reserve, Kevin Warsh, set the tone for his tenure in the press conference that followed last week’s rate decision and the financial markets reacted negatively. Warsh’s vision for the Fed is more restrained, and he is launching a review of the Fed’s norms and protocols. This is an attempt to modernize the Fed into an institution that relies on the most current information to tackle inflation and to convey messages. He specified creating five task forces to review core parts of Fed operations, including communications, the balance sheet, data analysis, productivity/jobs, and the inflation framework. Warsh stated, “For each of these independent task forces I’m enlisting some of the very best minds, both inside and outside the economics profession. They will be supported by subject matter specialists from our superb Fed staff.” He also noted the potential for fewer press conferences, meeting transcripts, and other materials the Fed publishes.
Stocks, bonds, and mortgage-backed securities sold off in response to the Fed projections for a possible rate hike this year. Warsh’s comments added fuel to the selling pressure. Be cautious in the days and weeks ahead as fear and uncertainty dominate trading.
To
unsubscribe, please hit "reply" and include unsubscribe in
the subject line.
Copyright
2018. All Rights Reserved. Mortgage Market
Information Services, Inc. www.ratelink.com
The information contained herein is
believed to be accurate, however no representation or warranties are
written or implied.
|
