Daily Rate Lock Advisory

Indexes Affecting Rate Lock

Medium

Positive

Treasury Auctions (5,7,10,20,30 year)

Yesterday’s 30-year Treasury Bond auction drew a strong demand from investors, helping to offset some of the late morning and midday weakness in bonds. We did see a positive reaction after results were announced at 1:00 PM ET, but the move was not enough to erase the pre-auction selling that started after morning pricing was posted. This led to some lenders issuing a midday increase in rates. A bit of buying that came in at the end of the day could have created a small intraday improvement in rates if bonds hadn’t weakened earlier.

High

Negative

Producer Price Index (PPI)

September’s Producer Price Index (PPI) was posted at 8:30 AM ET. It gave us better inflation news at the wholesale level of the economy than yesterday’s consumer version did (CPI). The overall reading for September came in unchanged from August and the more important core data that excludes volatile food and energy costs rose 0.2%. Forecasts had the overall reading rising 0.1% and the core data up 0.2%. Annually, the overall reading rose at a 1.8% pace, down slightly from August’s upwardly revised 1.9% but higher than the 1.6% that was expected. The year-over-year core data also was stronger than expected, up 2.8% after August was revised higher to 2.6%. These numbers indicate wholesale inflation was as expected or a little softer in September. However, stronger than previously announced August readings are causing the annual numbers to show an increase and stand higher than expected.

Medium

Positive

Univ of Mich Consumer Sentiment (Prelim)

Closing out this week’s economic calendar was October’s preliminary Consumer Sentiment Index from the University of Michigan at 10:00 AM ET. It revealed that surveyed consumers were a little less confident in their own financial situations than many had thought. The 68.9 reading was lower than the expected 70.3 and a decline from September’s 70.1. This is good news for rates because waning confidence usually translates into softer consumer spending numbers that create closer economic activity.

Low

Neutral

Holiday Schedule

The bond market will be closed Monday for the Columbus / Indigenous Peoples’ Holiday, without an early close today. U.S. stock markets will be open for a full trading day Monday. We can expect most lenders to use this afternoon’s rates for Monday’s pricing or wait for Tuesday morning before allowing a rate to be locked. Despite the holiday, there are several Fed-member speeches scheduled Monday.

High

Unknown

Retail Sales

There are only a couple of relevant economic reports scheduled for release next week. One of them is considered to be highly important though (Retail Sales). With a much lighter calendar than this week, we should see less volatility in mortgage rates even though we can expect to see some movement. Look for details on all of next week’s scheduled activities in Sunday evening’s weekly preview.

Rate Lock Advisory