MIG Market Watch, January 29th, 2024
Market Comment

Mortgage bond prices finished the week near unchanged which left rates flat. We still saw up and down trading but most the changes were within a very narrow range in contrast to the first three weeks of trading this year. The data was mixed and showed some economic strength but tame inflation. Leading economic indicators fell 0.1% vs the expected 0.3% decline. Weekly jobless claims were 214K vs 200K. Durable goods orders were unchanged vs the expected 1.1% increase. Gross domestic product rose 3.3% vs 2%. Personal income rose 0.3% as expected and spending rose 0.7% vs 0.4%. Core PCE inflation, the Fed’s preferred gauge, rose 0.2% as expected. Mortgage interest rates finished the week with very little changes to discount points.


Looking Ahead
Economic Indicator Release Date & Time Consensus Estimate Analysis
FHFA House Price Index Tuesday, Jan. 30,
10:00 am, et
Up 0.4% Moderately Important. A measure of single-family house prices. Weakness may lead to lower rates.
Consumer Confidence Tuesday, Jan. 30,
10:00 am, et
116 Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates.
ADP Employment Wednesday, Jan. 31,
8:15 am, et
130K Important. An indication of employment. Weakness may bring lower rates.
Q4 Employment Cost Index Wednesday, Jan. 31,
8:30 am, et
Up 1.4% Very important. A measure of wage inflation. Weakness may lead to lower rates.
Fed Meeting Adjourns Wednesday, Jan. 31,
2:15 pm, et
No rate changes Important. Few expect the Fed to change rates, but some volatility may surround the adjournment of this meeting.
Weekly Jobless Claims Thursday, Feb. 1,
8:30 am, et
215K Important. An indication of employment. Higher claims may result in lower rates.
ISM Index Thursday, Feb. 1,
10:00 am, et
47.7 Important. A measure of manufacturer sentiment. Weakness may lead to lower mortgage rates.
Employment Friday, Feb. 2,
8:30 am, et
3.8%,
Payrolls +178K
Very important. An increase in unemployment or weakness in payrolls may bring lower rates.
U of Michigan Consumer Sentiment Friday, Feb. 2,
10:00 am, et
78.8 Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates.

Employment Cost Index

The employment cost index is a quarterly report issued by the Department of Labor. The report measures the growth of wages, salaries, and benefits costs over a certain period of time. Though ECI figures are usually weeks old, the data remains the best indicator of employment price pressures considering it factors employees’ total compensation.

If wage pressures become evident, higher expectations of inflation also tend to arise. However, increasing compensation does not necessarily lead to increased inflationary pressures. Oftentimes, increased productivity enables employers to increase compensation without increasing the costs of their goods or services. Be cautious heading into this release.

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