MIG Market Watch, October 18th, 2021
Posted by : Admin
MARKET COMMENT
Mortgage bond prices finished the week near unchanged which kept rates relatively flat. We started the week on a negative note Tuesday following the extended holiday weekend. Small positive movements the rest of the week erased those losses and a little more. Tame inflation readings and continued Fed MBS purchases helped with the rebound. Producer prices rose 0.5% vs 0.6%. The core, which excludes volatile food and energy prices, rose 0.2% vs 0.5%. Consumer prices rose 0.4% vs 0.3%. The core rose 0.2% vs 0.3%. Weekly jobless claims were 293K vs 323K. Retail sales rose 0.7% vs the expected 0.5% decline. Consumer sentiment was 71.4 vs 73.0. Mortgage interest rates finished the week approximately unchanged to better by 1/8 of a discount point.
LOOKING AHEAD
| Economic Indicator | Release Date & Time | Consensus Estimate | Analysis |
| Industrial Production | Monday, Oct. 18, 9:15 am, et |
Up 0.3% | Important. A measure of manufacturing sector strength. A lower than expected increase may lead to lower rates. |
| Capacity Utilization | Monday, Oct. 18, 9:15 am, et |
76.5% | Important. A figure above 85% is viewed as inflationary. Weaker figure may lead to lower rates. |
| NAHB Housing Index | Monday, Oct. 18, 10:00 am, et |
76 | Moderately Important. A measure of single-family housing. Weakness may lead to lower mortgage rates. . |
| Housing Starts | Tuesday, Oct. 19, 8:30 am, et |
1.63M | Important. A measure of housing sector strength. Weakness may lead to lower rates. |
| Philadelphia Fed Survey | Thursday, Oct. 21, 8:30 am, et |
20.2 | Moderately important. A survey of business conditions in the Northeast. Weakness may lead to lower rates. |
| Existing Home Sales | Thursday, Oct. 21, 10:00 am, et |
6M | Low importance. An indication of mortgage credit demand. Significant weakness may lead to lower rates. |
| Leading Economic Indicators | Thursday, Oct. 21, 10:00 am, et |
Up 0.4% | Important. An indication of future economic activity. A smaller increase may lead to lower rates. . |
Philadelphia Fed
Federal Reserve Banks were created to control the central banking system of the United States. The banks are divided into 12 districts and facilitate the monetary system by moving currency in and out of circulation in accordance with the policies set by the Federal Open Market Committee. The Reserve Banks handle check processing, hold cash reserves, and make loans to depository institutions. Each Reserve Bank regulates commercial banks in their district. The twelve districts include Boston, New York, Philadelphia, Cleveland, Richmond, Atlanta, Chicago, St. Louis, Minneapolis, Kansas City, Dallas, and San Francisco. The Philadelphia Fed report is a survey of manufacturing businesses in the Northeast region.
The report is valuable due to the timing. It is released before the month is over and is the second regional report released. While there are many other regional reports throughout the month the Philadelphia Fed report is considered the most valuable. It has historically shown strong correlation with purchasing managers index data and therefore analysts give it considerable attention.
