MIG Market Watch, July 29th, 2019
Posted by : Admin
MARKET COMMENT
Mortgage bond prices finished the week near unchanged which held rates in check. The data generally showed economic strength with a tight labor market. The FHFA Housing Price Index rose 0.1%. Traders expected prices to rise 0.4%. The Housing Price Index (HPI) is a broad measure of the movement of single-family house prices. Existing home sales printed at 5.27M units versus the expected 5.3M. New home sales printed at 646,000 versus the expected 660,000. Durable goods rose a stronger than expected 2%. Weekly jobless claims printed at 206K and continuing claims, a summation of all receiving benefits, at 1,676K. Expectations were for claims at 215K and continuing claims at 1,686K. Q2 gross domestic product rose 2.1%. Mortgage interest rates finished the week better by approximately 1/8 of a discount point.
LOOKING AHEAD
| Economic Indicator | Release Date & Time | Consensus Estimate | Analysis |
| Personal Income and Outlays | Tuesday, July 30, 8:30 am, et |
Up 0.4%, Up 0.4% |
Important. A measure of consumers’ ability to spend. Weakness may lead to lower mortgage rates. |
| PCE Core Inflation | Tuesday, July 30, 8:30 am, et |
Up 0.2% | Important. A measure of price increases for all domestic personal consumption. Weaker figure may help rates improve. |
| Consumer Confidence | Tuesday, July 30, 10:00 am, et |
122 | Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates. |
| ADP Employment | Wednesday, July 31, 8:30 am, et |
115K | Important. An indication of employment. Weakness may bring lower rates. |
| Q2 Employment Cost Index | Wednesday, July 31, 8:30 am, et |
Up 0.8% | Very important. A measure of wage inflation. Weakness may lead to lower rates. |
| Fed Meeting Adjourns | Wednesday, July 31, 2:15 pm, et |
25 basis point rate cut | Important. Most expect the Fed to change rates and some volatility may still surround the adjournment of this meeting. |
| ISM Index | Thursday, Aug. 1, 10:00 am, et |
51.4 | Important. A measure of manufacturer sentiment. Weakness may lead to lower mortgage rates. |
| Employment | Friday, Aug. 2, 8:30 am, et |
3.7%, Payrolls +225K |
Very important. An increase in unemployment or weakness in payrolls may bring lower rates. |
| Trade Data | Friday, Aug. 2, 8:30 am, et |
$56B deficit | Important. Affects the value of the dollar. A falling deficit may strengthen the dollar and lead to lower rates. |
| Factory Orders | Friday, Aug. 2, 10:00 am, et |
Down 0.2% | Important. A measure of manufacturing sector strength. Weakness may lead to lower rates. |
Fed Cut
What the Federal Reserve will do at their meeting this week is at the top of mind for global traders. A month ago, market participants expected the Fed to cut rates by as much as 1/2% after the economy appeared to be slowing. Since then, a string of STRONG data has been released putting into question what moves the Fed will make. A 25-basis point cut is still expected but the odds of a larger cut now hover around 21%. Be alert around the Fed meeting as volatility is possible.
