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Mortgage Market in Review – April 27, 2015

Market Comment

Mortgage bond prices finished the week lower, which pushed mortgage interest rates higher. Rates were neutral Monday morning but pushed a little higher that afternoon and into Tuesday morning. There were very few economic releases. The housing data was stronger than expected. Existing home sales printed at 5.19M versus the expected 5.05M units. New home sales came in at 481K versus the expected 475K. Weekly jobless claims were 295K. Analysts expected claims at 285K.

Mortgage interest rates finished the week worse by approximately 1/8 of a discount point.

LOOKING AHEAD

Economic
Indicator
Release
Date & Time
Consensus
Estimate

Analysis
Consumer Confidence Tuesday, April 28,
10:00 am, et
100.8 Important.  An indication of consumers’ willingness to spend.  Weakness may lead to lower mortgage rates.
Treasury Auctions Begin Tuesday, April 28,
1:15 pm, et
None Important.  2Y Notes on Tuesday, 5Y Notes on Wednesday, and 7Y Notes on Thursday.
Q1 Advance GDP Wednesday, April 29,
8:30 am, et
Up 2.1% Very important.  The aggregate measure of US economic production.  Weakness may lead to lower rates.
Fed Meeting Adjourns Wednesday, April 29,
2:15 pm, et
No rate changes Important.  Few expect the Fed to change rates, but some volatility may surround the adjournment of this meeting.
Weekly Jobless Claims Thursday, April 30,
8:30 am, et
292k Important.  An indication of employment.   Higher claims may result in lower rates.
Personal Income and Outlays Thursday, April 30,
8:30 am, et
Up 0.2%,
Up 0.2%
Important.  A measure of consumers’ ability to spend.  Weakness may lead to lower mortgage rates.
PCE Core Inflation Thursday, April 30,
8:30 am, et
Up 0.1% Important.  A measure of price increases for all domestic personal consumption.  Weaker figure may help rates improve.
Q1 Employment Cost Index Thursday, April 30,
8:30 am, et
Up 0.4% Very important. A measure of wage inflation.  Weakness may lead to lower rates.
ISM Index Friday, May 1,
10:00 am, et
51.6 Important.  A measure of manufacturer sentiment.  Weakness may lead to lower mortgage rates.
U of Michigan Consumer Sentiment Friday, May 1,
10:00 am, et
96.1 Important.  An indication of consumers’ willingness to spend.  Weakness may lead to lower mortgage rates.

Gross Domestic Product

The Gross Domestic Product (GDP) is one the most important reports during any given quarter.  GDP is a measure of US economic output and spending.  The report is significant in that it provides investors, analysts, traders, and economists with a comprehensive report of the direction of the economy.  In addition, it also influences the decisions of Federal Reserve policy makers, Congressional budget employees, and corporate financial planners.  GDP is the sum total of goods and services produced by the United States.  The initial report is often based on incomplete data.  Therefore, additional revisions are released over the following two months.  Be cautious heading into the GDP release.


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