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MIG Market Watch, June 16th, 2025
Posted by : Moneek-2
Market Comment
Mortgage bond prices finished the week slightly positive which put a little downward pressure on rates. The MBS market traded back and forth within a relatively tight range. Rates worsened Monday, recovered Tuesday, were flat Wednesday, rallied Thursday, and worsened Friday. The data was mixed with very little price pressures. Consumer prices rose 0.1% vs 0.2%. The core was up 0.1% vs 0.3%. Producer prices rose 0.1% vs 0.2%. The core was up 0.1% vs 0.3%. Weekly jobless claims were 248K vs 240K. Consumer sentiment was a solid 60.5 vs 53.5. 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 |
|---|---|---|---|
| Retail Sales | Tuesday, June 17, 8:30 am, et | Down 0.5% | Important. A measure of consumer demand. Weakness may lead to lower mortgage rates. |
| Industrial Production | Tuesday, June 17, 9:15 am, et | Up 0.1% | Important. A measure of manufacturing sector strength. Weakness may lead to lower rates. |
| Capacity Utilization | Tuesday, June 17, 9:15 am, et | 77.7% | Important. A figure above 85% is viewed as inflationary. Weakness may lead to lower rates. |
| NAHB Housing Index | Tuesday, June 17, 10:00 am, et | 35 | Moderately Important. A measure of single-family housing. Weakness may lead to lower mortgage rates. |
| Housing Starts | Wednesday, June 18, 8:30 am, et | 1.36M | Important. A measure of housing sector strength. Weakness may lead to lower rates. |
| Fed Meeting Adjourns | Wednesday, June 18, 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. |
| Philadelphia Fed Survey | Friday, June 20, 10:00 am, et | 16.8 | Moderately important. A survey of business conditions in the Northeast. Weakness may lead to lower rates. |
| Leading Economic Indicators | Friday, June 20, 10:00 am, et | Down 0.1% | Important. An indication of future economic activity. Weakness may lead to lower rates. |
Production
The Federal Reserve releases the Industrial Production report each month. It is a real measure of output from manufacturing, mining, electric, and gas utilities. The data is significant in that it provides an indicator of the state of the economy. Analysts use the data to attempt to determine market direction. The Fed uses the data to help set the course for monetary policy. Generally, the Fed likes to see steady growth in the economy with little price pressures. They signaled to the market for some time that they are data dependent and will continue to keep rates high to fight inflation.
Mortgage interest rates usually react favorably to weaker than expected industrial production data. In times of economic weakness investors often move out of stocks and into mortgage bonds. When things look good investors often move out of bonds and back into stocks.
The Fed remains “data dependent” regarding future rate adjustment policy. A cautious approach to float/lock decisions is prudent heading into economic releases.
