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Mortgage Market in Review – December 18, 2017

   

Market Comment

Mortgage bond prices finished the week lower which put upward pressure on rates. Rates were volatile Tuesday in response to a higher than expected core inflation reading. Producer prices rose 0.4% and the core value, which excludes the volatile food and energy components, rose 0.3%. Economists expected PPI to rise 0.4% and the core value to rise 0.2%. Tame consumer inflation readings Wednesday tempered some of the earlier losses. CPI rose 0.4% as expected. However, the core rose 0.1% versus the expected 0.2% increase. The Fed raised rates 25 basis points as expected. This was already factored into trading and didn’t move things much. Retails sales shocked on the upside with a 0.8% increase versus an expected 0.3% increase. Weekly jobless claims were 225K. Analysts looked for a mark of 235K. We ended the week worse by approximately 1/8 to 1/4 of a discount point.


LOOKING AHEAD

Economic
Indicator
Release
Date & Time
Consensus
Estimate

Analysis
NAHB Housing Index Monday, Dec. 18,
10:00 am, et
70 Moderately Important. A measure of single family housing. Weakness may lead to lower mortgage rates.
Housing Starts Tuesday, Dec. 19,
8:30 am, et
1.3M Important. A measure of housing sector strength. Weakness may lead to lower rates.
Q3 GDP Revised Thursday, Dec. 21,
8:30 am, et
Up 3.3% Very important. The aggregate measure of US economic production. Weakness may lead to lower rates.
Philadelphia Fed Survey Thursday, Dec. 21,
10:00 am, et
23 Moderately important. A survey of business conditions in the Northeast. Weakness may lead to lower rates.
Weekly Jobless Claims Thursday, Dec. 21,
8:30 am, et
225K Important. An indication of employment. Higher claims may result in lower rates.
Personal Income and Outlays Friday, Dec. 22,
8:30 am, et
Up 0.3%,
Up 0.2%
Important. A measure of consumers’ ability to spend. Weakness may lead to lower mortgage rates.
PCE Core Inflation Friday, Dec. 22,
8:30 am, et
Up 0.1% Important. A measure of price increases for all domestic personal consumption. Weaker figure may help rates improve.
Durable Goods Orders Friday, Dec. 22,
8:30 am, et
Up 0.4% Important. An indication of the demand for “big ticket” items. Weakness may lead to lower rates.
New Home Sales Friday, Dec. 22,
10:00 am, et
685K Important. An indication of economic strength and credit demand. Weakness may lead to lower rates.

Income and Outlays

The personal income and outlays release is a monthly report issued by the Bureau of Economic Analysis (BEA). The data is important because it is thought to provide a solid indication of future consumer demand. The personal income component is primarily a measure of wages and salaries. The outlays component is primarily a measure of spending on goods and services. Together the figures provide analysts valuable insight into consumer economic standing and consumption.

Copyright 2017. 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.