Updated on September 16, 2019 10:48:11 AM EDT
There is no relevant economic data scheduled for release today. The rest of the week brings us four reports that could affect mortgage rates, none of which are considered to be key releases. We also have an afternoon filled with Fed FOMC events midweek that will likely cause plenty of volatility. While the data probably will not influence rates heavily, the Fed events could help reverse the negative momentum in bonds and mortgage pricing. Or, possibly cause another leg higher. In other words, despite the lack of key data, it still is going to be a highly important week for the markets.
Augusts Industrial Production data will start this week’s activities at 9:15 AM ET tomorrow. This report gives us a measurement of manufacturing sector strength by tracking output at U.S. factories, mines and utilities. It is considered to be moderately important, meaning it can influence mortgage rates if it shows a noticeable variation from forecasts. A 0.1% rise from Julys level of output is what market participants are expecting to see. A larger increase would be negative news for bonds and mortgage rates, while a weaker than expected figure would be considered good news.
The weekend attack on the Saudi oil refinery is fueling this morning’s bond gains, but it is worth noting that they are well off of their best levels during overnight trading. Generally speaking, situations of political turmoil and/or war are favorable for bonds and detrimental to stocks. Comments from President Trump have hinted that a military strike may be in the works as a reaction to the attack. Unless there is a major retaliation for the attack, this event will likely not have an extended impact on mortgage rates.
Overall, Wednesday is the most important day of the week for rates while Friday is best candidate for calmest day unless something unforeseen happens. The Fed events late Wednesday our best bet for a rally this week in rates.
©Mortgage Commentary 2019