Market Comment
Mortgage bond prices remained near unchanged holding mortgage interest rates relatively steady for the week. There was very little data the first portion of the week and rates improved slightly as the DOW was down 183 points at one point Monday morning. Unfortunately the durable goods orders and new home sales data were not as weak as expected which helped stocks rally at the expense of bonds the latter portion of the week. For the week, interest rates on government and conventional loans were unchanged.
The Treasury auctions will factor heavily in trading this week. It will be interesting to see how the additional debt supply is absorbed. The gross domestic product and employment cost index data will be the most important releases. No surprises are expected from the Fed but the meeting may still result in some mortgage interest rate volatility.
LOOKING AHEAD
|
Economic |
Release |
Consensus |
|
| 2-year Treasury Note Auction |
Monday, April 27, |
None | Important. Notes will be auctioned. Strong demand may lead to lower mortgage rates. |
| Consumer Confidence |
Tuesday, April 28, |
28 |
Important. An indication of consumers' willingness to spend. Weakness may lead to lower mortgage rates. |
| 5-year Treasury Note Auction |
Tuesday, April 28, |
None |
Important. Notes will be auctioned. Strong demand may lead to lower mortgage rates. |
| Q1 Advance GDP |
Wednesday, April 29, |
Down 4.9% | Very important. The aggregate measure of US economic production. Weakness may lead to lower rates. |
| 7-year Treasury Note Auction |
Wednesday, April 29, |
None |
Important. Notes will be auctioned. Strong demand may lead to lower mortgage rates. |
| Fed Meeting Adjourns |
Wednesday, April 29, |
No change |
Important. Few expect the Fed to change rates, but some volatility may surround the adjournment of this meeting. |
| Personal Income and Outlays |
Thursday, April 30, |
Down 0.2%, |
Important. A measure of consumers' ability to spend. Weakness may lead to lower mortgage rates. |
| Q1 Employment Cost Index |
Thursday, April 30, |
Up 0.5% | Very important. A measure of wage inflation. Weakness may lead to lower rates. |
| U of Michigan Consumer Sentiment |
Friday, May 1, |
61.3 | Important. An indication of consumers' willingness to spend. Weakness may lead to lower mortgage rates. |
| Factory Orders |
Friday, May 1, |
Down 0.7% | Important. A measure of manufacturing sector strength. A larger decrease may lead to lower rates. |
| ISM Index |
Friday, May 1, |
38.0 | Important. A measure of manufacturer sentiment. A larger decline may lead to lower mortgage rates. |
Relevant Data
This week brings significant data. However, the results of some of the releases may be muted a bit considering they take place after the Fed meeting adjourns Wednesday. Nonetheless, the inflation release still has the potential to result in market swings so caution is the key. Remember that market direction can turn very quickly as has been evident of late. It is a safe bet that nobody wants to get caught behind the market if it does make a huge correction following a release.
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