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Market
Comment
Mortgage bond prices finished the week sharply higher which put significant downward pressure on rates. Back and forth trading continued around daily tariff developments. Flight to safety buying of US Treasuries and MBSs resumed after a disruption in those flows the prior week. The data was mixed. Retail sales rose 1.4% vs 1.3%. Industrial production fell 0.3% vs the
expected 0.2% decrease. Capacity use was 77.8% vs 78%. NAHB housing was 40 vs 37. Weekly jobless claims were 215K vs 225K. Housing starts were 1.324M vs 1.42M. The Philadelphia Fed business conditions index was 6.9 vs 5.6. Mortgage interest rates finished the week better by approximately 1 full discount point.
LOOKING
AHEAD
|
Economic
Indicator |
Release
Date &
Time |
Consensus
Estimate |
Analysis
|
| Leading Economic Indicators |
Monday, April 21,
10:00 am, et
|
Down 0.2%
|
Important. An indication of future economic activity. Weakness may lead to lower rates.
|
| Treasury Auctions Begin |
Tuesday, April 22,
1:15 pm, et
|
None
|
Important. 2Y Notes Tuesday, 5Y Wednesday, 7Y Thursday. Strong demand may lead to lower mortgage rates.
|
| New Home Sales |
Wednesday, April 23,
10:00 am, et
|
680K
|
Important. An indication of economic strength and credit demand. Weakness may lead to lower rates.
|
| Durable Goods Orders |
Thursday, April 24,
8:30 am, et
|
Up 0.8%
|
Important. An indication of the demand for “big ticket” items. Weakness may lead to lower rates.
|
| Existing Home Sales |
Thursday, April 24,
10:00 am, et
|
4.2M
|
Low importance. An indication of mortgage credit demand. Significant weakness may lead to lower rates.
|
| U of Michigan Consumer Sentiment |
Friday, April 25,
10:00 am, et
|
50.8
|
Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates.
|
Consumer Sentiment
In the US the consumer is often seen as the driving force of the economy. A large percentage of the total economic output is for personal use. Analysts attempt to predict the future spending patterns of consumers to gauge economic activity.
The Michigan consumer sentiment index is one piece of data used to measure consumer attitudes. The index is derived from a telephone survey, which gathers information on consumer expectations of the overall economy. The preliminary report is released around the 10th of each month and then is revised throughout the remainder of the month. It 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. American consumers continue to spend despite high interest rates, dampening housing, and economic uncertainty. Jolts amid the tariff turmoil could cause concern.
Look for any variation from estimates in the consumer data this week 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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