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MIG Market Watch, June 3rd, 2019

MIG Market Watch, June 3rd, 2019


MIG Market Watch, June 3rd, 2019

MARKET COMMENT

Mortgage bond prices finished the week slightly higher which helped rates improve.  The FHFA housing index rose 0.1% versus the expected 0.3% increase.  Consumer confidence surprised to the upside as the reading was a solid 134.1 versus the expected 130.  Weekly jobless claims were near estimates at 215K.  Gross domestic product data showed the economy grew at a 3.1% pace in the first quarter.  Personal income rose 0.5% and spending rose 0.3%.  That data was better than expectations for income to rise 0.3% and spending to rise 0.2%.  The inflation component of the report, core PCE inflation rose 0.3% as expected.  Consumer sentiment printed at 100, which was near expectations.

Mortgage interest rates finished the week near better by approximately 1/8 of a discount point.

LOOKING AHEAD

Economic Indicator Release Date & Time Consensus Estimate Analysis
ISM Index Monday, June 3,
10:00 am, et
53 Important.  A measure of manufacturer sentiment.  Weakness may lead to lower mortgage rates.
Construction Spending Monday, June 3,
10:00 am, et
Up 0.2% Low importance.  An indication of economic strength.  Significant weakness may lead to lower rates.
Factory Orders Tuesday, June 4,
10:00 am, et
Up 1.1% Important.  A measure of manufacturing sector strength.  Weakness may lead to lower rates.
ADP Employment Wednesday, June 5,
8:30 am, et
288K Important.  An indication of employment.  Weakness may bring lower rates.
Fed “Beige Book” Wednesday, June 5,
2:00 pm, et
None Important.  This Fed report details current economic conditions across the US.  Signs of weakness may lead to lower rates.
Weekly Jobless Claims Thursday, June 6,
8:30 am, et
213K Important.  An indication of employment.   Higher claims may result in lower rates.
Trade Data Thursday, June 6,
8:30 am, et
$51B deficit Important.  Affects the value of the dollar.  A falling deficit may strengthen the dollar and lead to lower rates.
Revised Q1 Productivity Thursday, June 6,
8:30 am, et
Up 3.2% Important.  A measure of output per hour.  Improvement may lead to lower mortgage rates.
Employment Friday, June 7,
8:30 am, et
3.6%,
Payrolls +242K
Very important.  An increase in unemployment or weakness in payrolls may bring lower rates.

 

 


ADP Employment

The ADP employment report is a measure of employment derived from data of roughly 500,000 US businesses.  The survey focuses on the private sector of the economy.  In contrast, the Bureau of Labor Statistics releases the regular employment report which includes both private and government employment statistics.

 

The Fed is usually focused on inflation.  Tightening employment conditions can result in wage inflation.  The ADP report provides solid data on these conditions. Despite this, the data can still diverge from the regular employment report.  The employment report is derived from a household survey and an establishment survey.  These surveys often differ from one another and from the ADP employment report in that they are based on different data sets.

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