![Mortgage Investors Group in [Dynamic1]](../assets/images/mortgage-investors-group.svg)
Market Comment
Mortgage bond prices finished the week slightly higher which put a little downward pressure on rates. Equities remained generally positive even amid the US government shutdown. MBS prices traded within a very narrow range with a slight positive bias. The government data was delayed while a few other releases supported the overwhelming sentiment that the Fed will cut rates later this month to spur the economy. Consumer confidence was 94.2 vs 96. The FHFA House Price Index fell 0.1% vs the expected 0.1% increase. ISM index was 49.1 vs 49. ADP employment fell 32K vs up 50K. Mortgage interest rates finished the week better by approximately 1/8 to 1/4 of a discount point.
LOOKING AHEAD
| Economic Indicator | Release Date & Time | Consensus Estimate | Analysis |
| Trade Data | Tuesday, Oct. 7, 8:30 am, et | $61B 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, Oct. 7, 1:15 pm, et | None | Important. Notes will be auctioned. Strong demand may lead to lower mortgage rates. |
| Consumer Credit | Tuesday, Oct. 7, 3:00 pm, et | $14.2B | Low importance. A significantly large increase may lead to lower mortgage interest rates. |
| 10-year Treasury Note Auction | Wednesday, Oct. 8, 1:15 pm, et | None | Important. Notes will be auctioned. Strong demand may lead to lower mortgage rates. |
| Fed Minutes | Wednesday, Oct. 8, 2:00 pm, et | None | Important. Details of the last Fed meeting will be thoroughly analyzed. |
| Weekly Jobless Claims | Thursday, Oct. 9, 8:30 am, et | 230K | Important. An indication of the employment situation. Weakness may lead to lower rates. |
| 30Y Treasury Bond Auction | Thursday, Oct. 9, 1:15 pm, et | None | Important. Bonds will be auctioned. Strong demand may lead to lower mortgage rates. |
| U of Michigan Consumer Sentiment | Friday, Oct. 10, 10:00 am, et | 55 | Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates. |
All About the U.S.
The United States takes center stage as the global economy looks to see the effects of the recent shutdown coupled with the path the Fed takes to cut rates and stimulate growth. The data in the months ahead will likely garner more attention and we have a few releases heading our way this week. Mortgage interest rates generally respond well to moderate growth with little price pressures. The big uncertainty with the US Government data is whether we will see results soon or if they will be continually delayed. The financial markets so far have all but shrugged off the impacts of the shutdown as stocks pushed higher and bonds remained steady. That could change if the shutdown lengthens.
The data isn’t the only thing pushing the financial markets up and down. Fed intervention remains very much in the forefront. The Fed is expected to cut rates again at the October 28/29th meeting. However, Fed Chair Powell continues to warn of the possibility of inflation tied to tariffs and some express concerns the Fed could hold until they see the actual data that has not yet been released. Therefore, a cautious approach to float/lock decisions is wise during this period of uncertainty.
