There are four reports that are expected to be released this week that may concern mortgage rates depending on its economic data. Also, two important treasury auctions will take place. The Stock Market will be a major contributor early in the week for any movements in bond prices and mortgage rates.
At 2:00 PM ET on Wednesday, the Federal Reserve's Beige Book Report will be released. It will give details of the economic condition throughout the US by region. Since the Fed relies heavily on it during their FOMC meetings, its results can have a fairly big impact on the financial markets and mortgage rates if it reveals any surprises, particularly regarding inflation, unemployment or future hiring.
Wednesday and Thursday bring the treasury auctions featuring the sale of 10-year-notes and 30-year-bonds. The 10-year sale is the more important of the two as it will give us a better indication for demand of mortgage-related securities. If there is a strong demand from investors, we should see the bond market move higher during afternoon trading the days of the auctions. But a lackluster interest from buyers, particularly international investors, would indicate a waning appetite for longer-term U.S. securities and lead to broader bond selling. The selling in bonds would result in upward revisions to mortgage rates.
On Thursday, the most important report of the week is released: December's Retail Sales data. This comes from the Commerce Department. The report measures consumer spending and tracks tracks sales at retail establishments. Customer spending makes up two-thirds of the U.S. economy so this data is watched carefully. A sales increase of 0.4% is expected. A smaller than expected increase in sales would indicate consumers did not spend as much as thought over the holiday season, helping to prevent rapid economic growth. That would be considered good news for the bond market and mortgage rates.
At 2:00 PM ET on Wednesday, the Federal Reserve's Beige Book Report will be released. It will give details of the economic condition throughout the US by region. Since the Fed relies heavily on it during their FOMC meetings, its results can have a fairly big impact on the financial markets and mortgage rates if it reveals any surprises, particularly regarding inflation, unemployment or future hiring.
Wednesday and Thursday bring the treasury auctions featuring the sale of 10-year-notes and 30-year-bonds. The 10-year sale is the more important of the two as it will give us a better indication for demand of mortgage-related securities. If there is a strong demand from investors, we should see the bond market move higher during afternoon trading the days of the auctions. But a lackluster interest from buyers, particularly international investors, would indicate a waning appetite for longer-term U.S. securities and lead to broader bond selling. The selling in bonds would result in upward revisions to mortgage rates.
On Thursday, the most important report of the week is released: December's Retail Sales data. This comes from the Commerce Department. The report measures consumer spending and tracks tracks sales at retail establishments. Customer spending makes up two-thirds of the U.S. economy so this data is watched carefully. A sales increase of 0.4% is expected. A smaller than expected increase in sales would indicate consumers did not spend as much as thought over the holiday season, helping to prevent rapid economic growth. That would be considered good news for the bond market and mortgage rates.
