MARKET COMMENT
Mortgage bond prices finished the week slightly higher which helped rates fall. Rates were negative Monday morning amid escalating oil prices and inflation fears. Those losses were reversed Tuesday and Wednesday amid mixed data. FHFA housing data was lower than expected and new home sales data was stronger than expected. Durable goods orders surged higher with a 2.7% increase versus the expected 0.9% reading. The Treasury auctions showed mixed foreign demand. Q1 GDP rose 3.2% versus the expected 1.9% increase. Consumer sentiment was 97.2 which was in line with expectations. Mortgage interest rates finished the week better by approximately 1/8 of a discount point.
LOOKING AHEAD
| Economic Indicator | Release Date & Time | Consensus Estimate | Analysis |
| Personal Income and Outlays | Monday, April 29, 8:30 am, et | Up 0.3%, Up 0.2% | Important. A measure of consumers’ ability to spend. Weakness may lead to lower mortgage rates. |
| PCE Core Inflation | Monday, April 29, 8:30 am, et | Up 0.2% | Important. A measure of price increases for all domestic personal consumption. Weaker figure may help rates improve. |
| Q1 Employment Cost Index | Tuesday, April 30, 8:30 am, et | Up 0.6% | Very important. A measure of wage inflation. Weakness may lead to lower rates. |
| Consumer Confidence | Tuesday, April 30, 10:00 am, et | 125 | Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates. |
| ADP Employment | Wednesday, May 1, 8:30 am, et | 130K | Important. An indication of employment. Weakness may bring lower rates. |
| ISM Index | Wednesday, May 1, 10:00 am, et | 55.4 | Important. A measure of manufacturer sentiment. Weakness may lead to lower mortgage rates. |
| Fed Meeting Adjourns | Wednesday, May 1, 2:15 pm, et | No rate changes | Important. Few expect the Fed to change rates, but some volatility may surround the adjournment of this meeting. |
| Preliminary Q1 Productivity | Thursday, May 2, 8:30 am, et | Up 1.8% | Important. A measure of output per hour. Improvement may lead to lower mortgage rates. |
| Factory Orders | Thursday, May 2, 10:00 am, et | Up 0.3% | Important. A measure of manufacturing sector strength. Weakness may lead to lower rates. |
| Employment | Friday, May 3, 8:30 am, et | 3.9%, Payrolls +195K | Very important. An increase in unemployment or weakness in payrolls may bring lower rates. |
Jobs
Keep a sharp eye on the various employment related data this week. Last week’s weekly jobless claims caused a surprise with a surge higher. The data showed 230,000 new applications for unemployment. Analysts expected a number around 215,000. It is not uncommon for the weekly figures to miss estimates, but the sharply higher figure was an indicator that the U.S. economy remained uncertain. The Fed eased their rate hike course earlier this year. Strong employment data supports the call for rate hikes to resume.