MIG Market Watch, February 15th, 2021
MARKET COMMENT Mortgage bond prices finished the week lower which put upward pressure on rates. Rates were worse Monday, rebounded a little the middle of the week, and finished on a negative note. The Fed continued their multi-billion-dollar daily MBS purchases however it was not enough to prevent the slight upward movement in rates. The data was mixed with tame inflation readings. The consumer price index rose 0.3% as expected. The core, which excludes volatile food and energy, was unchanged vs an expected 0.2% increase. Weekly jobless claims were 793K vs the expected 750K. Consumer sentiment was 76.2 vs the expected 80.8. Mortgage interest rates finished the week worse by approximately 1/4 to 3/8 of a discount point.
LOOKING AHEAD
| Economic Indicator | Release Date & Time | Consensus Estimate | Analysis |
| Producer Price Index | Wednesday, Feb. 17, 8:30 am, et | Up 0.4%, Core up 0.2% | Important. An indication of inflationary pressures at the producer level. Weaker figures may lead to lower rates. |
| Retail Sales | Wednesday, Feb. 17, 8:30 am, et | Up 0.7% | Important. A measure of consumer demand. A smaller than expected increase may lead to lower mortgage rates. |
| Industrial Production | Wednesday, Feb. 17, 9:15 am, et | Up 0.4% | Important. A measure of manufacturing sector strength. A lower-than-expected increase may lead to lower rates. |
| Capacity Utilization | Wednesday, Feb. 17, 9:15 am, et | 74.8% | Important. A figure above 85% is viewed as inflationary. Weaker figure may lead to lower rates. |
| NAHB Housing Index | Wednesday, Feb. 17, 10:00 am, et | 83 | Moderately Important. A measure of single-family housing. Weakness may lead to lower mortgage rates. |
| Weekly Jobless Claims | Thursday, Feb. 18, 8:30 am, et | 825K | Important. An indication of employment. Higher claims may result in lower rates. |
| Housing Starts | Thursday, Feb. 18, 8:30 am, et | 1.653M | Important. A measure of housing sector strength. Weakness may lead to lower rates. |
| Philadelphia Fed Survey | Thursday, Feb. 18, 10:00 am, et | 22 | Moderately important. A survey of business conditions in the Northeast. Weakness may lead to lower rates. |
| Existing Home Sales | Friday, Feb. 19, 10:00 am, et | 6.55M | Low importance. An indication of mortgage credit demand. Significant weakness may lead to lower rates. |
NAHB INDEX The National Association of Home Builders (NAHB) releases the Housing Market Index each month which provides an indication of single-family housing market conditions. The results are derived from a survey of NAHB members in which members are asked to rate current market conditions, future market conditions, and prospective buyer traffic. The data is compiled and then a final number between 0 and 100 is released. A reading over 50 is generally considered positive. The data often correlates with the housing starts data. The release this week may provide an early indicator to the housing starts figure Thursday.
