![Mortgage Investors Group in [Dynamic1]](../assets/images/mortgage-investors-group.svg)
Market Comment
Mortgage bond prices finished the week lower which put upward pressure on rates. The Fed continued their daily MBS reinvestments, but it was not enough the stem the selling pressure. Their official stance of reducing their balance sheet went into effect June 1st but the first reductions will not take place until June 15th when some assets will mature without reinvestment. The data was very mixed. FHFA housing was 1.5 vs 1.9. Consumer confidence was 106.4 vs 104.1. ADP employment was 128K vs 300K. Weekly jobless claims were 200K vs 213K. Productivity fell 7.3% vs the expected 7.5% decline. US Secretary of the Treasury Yellen admitted she was “wrong” about inflation being transitory. Her remarks sent shockwaves through debt instruments such as treasuries and mortgage-backed securities. The employment report was mixed (see below.) Mortgage interest rates finished the week worse by approximately 1/2 to 5/8 of a discount point.
Looking Ahead
| Economic Indicator | Release Date & Time | Consensus Estimate | Analysis |
| Trade Data | Tuesday, June 7, 8:30 am, et |
$90.3B deficit | Important. Affects the value of the dollar. A falling deficit may strengthen the dollar and lead to lower rates. |
| 3-year Treasury Note Auction | Tuesday, June 7, 1:15 pm, et |
None | Important. Notes will be auctioned. Strong demand may lead to lower mortgage rates. |
| Consumer Credit | Tuesday, June 7, 3:00 pm, et |
$52B | Low importance. A significantly large increase may lead to lower mortgage interest rates. |
| 10-year Treasury Note Auction | Wednesday, June 8, 1:15 pm, et |
None | Important. Notes will be auctioned. Strong demand may lead to lower mortgage rates. |
| Weekly Jobless Claims | Thursday, June 9, 8:30 am, et |
212K | Important. An indication of employment. Higher claims may result in lower rates. |
| 30Y Treasury Bond Auction | Thursday, June 9, 1:15 pm, et |
None | Important. Bonds will be auctioned. Strong demand may lead to lower mortgage rates. |
| Consumer Price Index | Friday, June 10, 8:30 am, et |
Up 0.7%, Core up 0.5% |
Important. A measure of inflation at the consumer level. Lower than expected increases may lead to lower rates. |
| U of Michigan Consumer Sentiment | Friday, June 10, 10:00 am, et |
61.0 | Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates. |
Employment
The Bureau of US Labor Statistics reported that unemployment came in at 3.6% as expected. However, total nonfarm payroll employment rose by 390,000 in May. Analysts expected an increase of 310,000. The report stated, “Notable job gains occurred in leisure and hospitality, in professional and business services, and in transportation and warehousing. Employment in retail trade declined.” “The change in total nonfarm payroll employment for March was revised down by 30,000, from +428,000 to +398,000, and the change for April was revised up by 8,000, from +428,000 to +436,000. With these revisions, employment in March and April combined is 22,000 lower than previously reported. (Monthly revisions resultfrom additional reports received from businesses and government agencies.)” “In May, the number of long-term unemployed (those jobless for 27 weeks or more) edged down to 1.4 million. This measure is 235,000 higher than in February 2020. The long-term unemployed accounted for 23.2 percent of all unemployed persons in May.”
