The Treasury will have a 30Y TIPS auction Thursday afternoon. If demand falters rates could be adversely affected. LOCK in mortgage rate in before Thursday if you can.
Economic Indicator |
Release Date and Time |
Consensus Estimate |
Analysis |
Retail Sales | Tuesday, Feb. 15, 8:30 am, et |
Up 0.5% | Important. A measure of consumer demand. A smaller than expected increase may lead to lower mortgage rates. |
Housing Starts | Wednesday, Feb. 16, 8:30 am, et |
495k | Important. A measure of housing sector strength. Weakness may lead to lower rates. |
Producer Price Index | Wednesday, Feb. 16, 8:30 am, et |
Up 0.8%, Core up 0.1% |
Important. An indication of inflationary pressures at the producer level. Weaker figures may lead to lower rates. |
Industrial Production | Wednesday, Feb. 16, 9:15 am, et |
Up 0.7% | Important. A measure of manufacturing sector strength. A lower than expected increase may lead to lower rates. |
Capacity Utilization | Wednesday, Feb. 16, 9:15 am, et |
75.5% | Important. A figure above 85% is viewed as inflationary. Weakness may lead to lower rates. |
Consumer Price Index | Thursday, Feb. 17, 8:30 am, et |
Up 0.4%, Core up 0.1% |
Important. A measure of inflation at the consumer level. Weaker figures may lead to lower rates. |
Weekly Jobless Claims | Thursday, Feb. 17, 8:30 am, et |
390k | Important. An indication of employment. Higher claims may result in lower rates. |
Leading Economic Indicators | Thursday, Feb. 17, 10:00 am, et |
Up 0.8% | Important. An indication of future economic activity. A smaller increase may lead to lower rates. |
Philadelphia Fed Survey | Thursday, Feb. 17, 10:00 am, et |
19 | Moderately important. A survey of business conditions in the Northeast. Weakness may lead to lower rates. |
China's central bank raised rates for the third time in four months to help ward off inflation as food and energy costs continue to rise. A drought in China is threatening the wheat crop, which is adding further pressure to commodity prices. Other emerging economies are also fearful of a spike in inflation. Market analysts are expecting Brazil's central bank to raise rates soon. The overnight lending rate there is currently 11.25%. In contrast, the Federal Reserve continues to add stimulus to the US economy keeping rates near zero and buying bonds.
The futures market is now pricing in a near 100% chance the Fed will move rates higher by December. Last week they put the odds of a rate increase at 25%. That is a big change in sentiment in such a short period of time. While interest rates have seen significant increases over the past few months they still remain historically very low. There are no guarantees rates will remain low as recent history has shown.
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