Updated on April 17, 2019 10:16:26 AM EDT
There is no relevant economic data set for release this morning. We will get an afternoon release that may affect mortgage rates. The Federal Reserve will post their Beige Book report at 2:00 PM ET today. This report is named simply after the color of its cover but provides opinion on economic conditions throughout the U.S. by Fed region. Since the Fed relies heavily on the contents of this report during their FOMC meetings, its results can have a fairly big impact on the financial markets and mortgage rates if it reveals any significant surprises. Generally speaking, signs of strong economic growth or inflation rising from the last update would be considered negative for bonds and mortgage rates. Slowing economic conditions with little sign of inflationary pressures would be ideal for rates.
Tomorrow has three economic reports scheduled to be posted. Besides the relatively inconsequential weekly unemployment figures, we will also get two monthly reports. The more important of them is the Commerce Department’s Retail Sales data for March at 8:30 AM ET. This data gives us a measurement of consumer spending, which is very important because consumer spending makes up over two-thirds of the U.S. economy. Forecasts are calling for a 0.8% rise in sales from February to March. If we see a larger increase in spending, the bond market will likely fall and mortgage rates will rise as it would indicate consumers are spending more than thought, fueling economic growth. On the other hand, a weaker than expected rise in sales could push bond prices higher and mortgage rates lower.
The remaining release will be the Conference Boards Leading Economic Indicators (LEI) for March at 10:00 AM ET. This data attempts to predict economic activity over the next three to six months. It is considered to be only a moderately important report, so at best we can expect to see a slight movement in rates as a result of this data. It is expected to show a 0.4% increase from Februarys reading, meaning it is predicting moderate growth in economic activity over the next several months. A decline would be considered good news for the bond market. However, primary focus will be on the sales data, not this release.
©Mortgage Commentary 2019