What To Expect Next Week

It's Sunday afternoon, the weekend between Christmas and New Years, and I'm sitting in front of a computer! No worries though; just catching up on some items that need to be worked on and thought I'd share some insights with respect what we may see next week with mortgage rates.

For the most part it will probably be a bit on the boring side with mortgage rates as we bring in the new year. But that doesn't mean we should ignore the week's economic events. A few of the economic events during the week could shape the direction of Mortgage Backed Securities move as well as consumer mortgage rates.

On The Calendar:

Here are the three main economic reports that could impact mortgage rates as we move into January, 2020. Due to the holiday it is unlikely we'll see significant moves during the week but in this industry you never know. Some say always expect the unexpected!

• Chicago PMI Report - December
• Consumer Confidence - December
• ISM Manufacturing PMI - December

These three reports tend to have an impact on the Mortgage Backed Securities market. If MBS prices decline, mortgage rates tend to move higher. If MBS prices improve, mortgage rates tend to move lower. The Chicago PMI is a monthly survey of business activity by the National Association of Purchasing Management (for the Chicago area).

Consumer Confidence is a month report that reflects the current level of business activity and the potential expectations for future activity. It basically measures consumer buying intentions. And ISM Manufacturing PMI is an important report based on the data collected from a monthly survey of purchasing and supply executives at some of the top companies in the country.

Mortgage Backed Securities:

On Friday the Fannie Mae 3.0 coupon finished the day at 101.45 and the 3.5 coupon finished at 102.84. Hard to say the exact direction MBS will move next week but a good guess will be that MBS should remain in the range established back in October and mortgage rates should remain stable. While the 10 year Treasury does not set mortgage rates it does have an influence over the MBS market. The 10 year yield finished the week at 1.87%.