MIG Market Watch, December 16th, 2019
MARKET COMMENT Mortgage bond prices finished the week near unchanged to slightly positive which kept rates in check. We started the week on a positive note Monday morning amid no data as rates improved slightly. The positive movement was short-lived as the gains were erased Tuesday morning. Q3 Productivity fell 0.2% versus the expected 0.1% decrease. Rates were flat Wednesday morning in response to tame inflation data. Consumer prices rose 0.3% and the core rate, which excludes the volatile food and energy costs, rose 0.2%. Traders expected both components of CPI to rise 0.2%. Weekly jobless claims were 252K versus the expected 212K. Producer prices were unchanged versus the expected 0.2% increase. Core PPI fell 0.2%. Analysts expected a 0.2% increase. Retail sales rose 0.2% versus the expected 0.5%. Mortgage interest rates finished the week unchanged to better by approximately 1/8 of a discount point.
LOOKING AHEAD
| Economic Indicator | Release Date & Time | Consensus Estimate | Analysis |
| NAHB Housing Index | Monday, Dec. 16, 10:00 am, et | 70 | Moderately Important. A measure of single-family housing. Weakness may lead to lower mortgage rates. |
| Housing Starts | Tuesday, Dec. 17, 8:30 am, et | 1.34M | Important. A measure of housing sector strength. Weakness may lead to lower rates. |
| Industrial Production | Tuesday, Dec. 17, 9:15 am, et | Up 0.8% | Important. A measure of manufacturing sector strength. A lower than expected increase may lead to lower rates. |
| Capacity Utilization | Tuesday, Dec. 17, 9:15 am, et | 77.4% | Important. A figure above 85% is viewed as inflationary. Weaker figure may lead to lower rates. |
| Weekly Jobless Claims | Thursday, Dec. 19, 8:30 am, et | 230K | Important. An indication of employment. Higher claims may result in lower rates. |
| Philadelphia Fed Survey | Thursday, Dec. 19, 8:30 am, et | 8.8 | Moderately important. A survey of business conditions in the Northeast. Weakness may lead to lower rates. |
| Existing Home Sales | Thursday, Dec. 19, 10:00 am, et | 5.45M | Low importance. An indication of mortgage credit demand. Significant weakness may lead to lower rates. |
| Personal Income and Outlays | Friday, Dec. 20, 8:30 am, et | Up 0.4%, Up 1.8% | Important. A measure of consumers’ ability to spend. Weakness may lead to lower mortgage rates. |
| Q3 GDP Third Estimate | Friday, Dec. 20, 8:30 am, et | Up 2.1% | Very important. The aggregate measure of US economic production. Weakness may lead to lower rates. |
| PCE Core Inflation | Friday, Dec. 20, 8:30 am, et | Up 0.1% | Important. A measure of price increases for all domestic personal consumption. Weaker figure may help rates improve. |
INCOME & OUTLAYS The personal income and outlays release is a monthly report issued by the Bureau of Economic Analysis (BEA). The data is important because it is thought to provide a solid indication of future consumer demand. The personal income component is primarily a measure of wages and salaries. The outlays component is primarily a measure of spending on goods and services. Together the figures provide analysts valuable insight into consumer economic standing and consumption.
