|
Market
Comment
Mortgage bond prices finished the week a little higher, which put some downward pressure on rates. Yields fell to multi-week lows by Friday as prices rose. The 10-year yield, which had hovered near or above 5% early in the week and briefly touched about 5.05% after the Federal Reserve’s expected decision to hold rates steady, slipped toward the low-to-mid 4.9% area. The move was driven mainly by safe-haven buying amid sharp weakness in technology and AI-related stocks, compounded by uncertainty over the Fed’s next steps and elevated oil prices that still failed to outweigh the flight to quality. The data was mixed. FHFA House Price Index rose 0.3% vs 0.2%. Consumer confidence was 91.7 vs 81. ADP employment was 16.8K vs 18.5K the prior week. Durable goods orders rose 1.8% vs 1.5%. Core PCE inflation was up 0.3% as expected. Mortgage interest rates finished the week better by approximately 1/8 to 1/4 of a discount point.
LOOKING
AHEAD
|
Economic
Indicator |
Release
Date &
Time |
Consensus
Estimate |
Analysis
|
| ISM Index |
Monday, Nov. 2,
10:00 am, et
|
54.7
|
Important. A measure of manufacturer sentiment. Weakness may lead to lower mortgage rates.
s
|
| Construction Spending |
Monday, Nov. 2,
10:00 am, et
|
Up 0.6%
|
Low importance. An indication of economic strength. Significant weakness may lead to lower rates.
|
| Factory Orders |
Tuesday, Nov. 3,
10:00 am, et
|
Up 1.1%
|
Important. A measure of manufacturing sector strength. Weakness may lead to lower rates.
|
| ADP Employment |
Wednesday, Nov. 4,
8:30 am, et
|
65K
|
Important. An indication of employment. Weakness may bring lower rates.
|
| Trade Data |
Wednesday, Nov. 4,
8:30 am, et
|
$107.6B deficit
|
Important. Affects the value of the dollar. A falling deficit may strengthen the dollar and lead to lower rates.
|
| Preliminary Q3 Productivity |
Thursday, Nov. 5,
8:30 am, et
|
Up 3.1%
|
Important. A measure of output per hour. Improvement may lead to lower mortgage rates.
|
| Employment |
Friday, Nov. 6,
8:30 am, et
|
4.2%,
Payrolls +65K
|
Very important. An increase in unemployment or weakness in payrolls may bring lower rates.
|
| U of Michigan Consumer Sentiment |
Friday, Nov. 6,
10:00 am, et
|
47.3
|
Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates.
|
Fuel Price Pressures
Rising fuel prices continue to pressure consumers and businesses, which impacts the entire economy. Every item that is shipped or trucked is impacted by the cost of diesel. The US Energy Information Administration reported October 27th that regular gasoline prices averaged $4.33 per gallon. The West Coast had the highest prices at $5.07 per gallon. U.S. On-Highway Diesel Fuel Prices averaged $6.17 per gallon while many areas peaked over $7 per gallon.
The price of gasoline is composed of 60% crude oil, 17% refining, 11% distribution and marketing, and 12% taxes. The diesel breakdown is slightly different at 49% crude oil, 28% refining, 12% distributions and marketing, and 11% taxes.
The EIA predicts gasoline prices around $4.20 in November but potential declines in December. Volatility is likely to continue over the next few months as the Middle East risks keep prices elevated.
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.
|
