Newsletter-April 12th, 2021    
Provided by
Robin Dunbar Bain
Robin Dunbar Bain
NMLS # - MLO18699
NMLS # - MB1498

Premiere Mortgage Services, Inc.
11 Malvern Hill Road
Sterling, MA 01564
Phone: (978) 422-2311
E-Mail: robin@bainmortgage.com
   
 

Market Comment

Mortgage bond prices finished the week higher which put downward pressure on rates. Rates were flat Monday morning despite factory orders weakness. Orders fell 0.8% vs the expected 0.7% decline. The Fed continued their massive MBS billion-dollar daily purchases. Most of the improvements came Monday afternoon and Tuesday morning amid no data. The trade deficit was $71.1B vs 70.5B. The Fed minutes highlighted improved economic output and noted “the date of the first increase in the target range for the federal funds rate implied by a straight read of market pricing moved notably earlier to the first quarter of 2023, and the implied target rate at the end of 2023 rose around 50 basis points.” Weekly jobless claims were higher than expected at 744K vs 690K. PPI rose 1% vs the expected 0.5% increase. The core rose 0.7% vs 0.2%. Mortgage interest rates finished the week better by approximately 1/2 to 5/8 of a discount point.

LOOKING AHEAD

Economic
Indicator

Release
Date & Time

Consensus
Estimate


Analysis

3Y and 10Y Treasury Note Auctions

Monday, April 12,
1:15 pm, et

None

Important. Notes will be auctioned. Strong demand may lead to lower mortgage rates.
Consumer Price Index

Tuesday, April 13,
8:30 am, et

Up 0.5%,
Core up 0.2%

Important. A measure of inflation at the consumer level. Lower than expected increases may lead to lower rates.
Retail Sales

Thursday, April 15,
8:30 am, et

Up 3.1%

Important. A measure of consumer demand. A smaller than expected increase may lead to lower mortgage rates.
Weekly Jobless Claims

Thursday, April 15,
8:30 am, et

685K

Important. An indication of employment. Higher claims may result in lower rates.
Philadelphia Fed Survey

Thursday, April 15,
8:30 am, et

42.5

Moderately important. A survey of business conditions in the Northeast. Weakness may lead to lower rates.
Industrial Production

Thursday, April 15,
9:15 am, et

Up 1.6%

Important. A measure of manufacturing sector strength. Weakness may lead to lower rates.
Capacity Utilization

Thursday, April 15,
9:15 am, et

75.4%

Important. A figure above 85% is viewed as inflationary. Weakness may lead to lower rates.
NAHB Housing Index

Thursday, April 15,
10:00 am, et

84

Moderately Important. A measure of single-family housing. Weakness may lead to lower mortgage rates.
U of Michigan Consumer Sentiment

Friday, April 16,
10:00 am, et

88.6

Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates.

Fed Projections

The Federal Reserve has eight scheduled meetings this year with the next ending April 28th. No rate adjustments are expected at this meeting, but we should get some revised forward guidance. The last report from the Fed made many short- and long-term projections about the U.S. economy. Member projections for Real GDP in 2021 range between 5.0 to 7.3. Those figures for 2022 range between 2.5 and 4.4 while 2023’s figures are 1.7 and 2.6. Unemployment ranges from 4 to 5.5 in 2021, 3.2 to 4.2 in 2022, 3.0 to 4.0 in 2023, and 3.5 to 4.5 for the “longer term.” Core PCE inflation, the Fed’s preferred inflation gauge, ranges from 1.9 to 2.5 in 2021, 3.2 to 4.2 in 2022, and 3.0 to 4.0 in 2023. The good news is the Fed expects rates to remain low overall this year. However, the expectations are for higher rates as we go out in time.

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   MORTGAGE MARKET IN REVIEW Newsletter-April 12th, 2021