![Mortgage Investors Group in [Dynamic1]](../assets/images/mortgage-investors-group.svg)
Market Comment
Mortgage bond prices finished the week higher which put downward pressure on rates. There were significant swings tied to higher than expected consumer inflation data. However, tame producer inflation readings countered the earlier weakness. Consumer prices rose 0.3% vs 0.2%. The core rose 0.3% as expected. Producer prices fell 0.1% vs the 0.1% increase. The Core was unchanged vs up 0.2%. The trade deficit was $63.2B vs $64.7B. Weekly jobless claims were 202K vs 210K. The Treasury auctions were average and resulted in lackluster afternoon trading on Tuesday and Wednesday. Mortgage interest rates finished the week better by approximately 1/2 to 5/8 of a discount point.
Looking Ahead
| Economic Indicator | Release Date & Time | Consensus Estimate | Analysis |
| Retail Sales | Wednesday, Jan. 17, 8:30 am, et |
Up 0.3% | Important. A measure of consumer demand. Weakness may lead to lower mortgage rates. |
| Industrial Production | Wednesday, Jan. 17, 9:15 am, et |
Down 0.1% | Important. A measure of manufacturing sector strength. Weakness may lead to lower rates. |
| Capacity Utilization | Wednesday, Jan. 17, 9:15 am, et |
78.6% | Important. A figure above 85% is viewed as inflationary. Weakness may lead to lower rates. |
| Business Inventories | Wednesday, Jan. 17, 10:00 am, et |
Down 0.1% | Low importance. An indication of stored-up capacity. Significant weakness may lead to lower rates. |
| NAHB Housing Index | Wednesday, Jan. 17, 10:00 am, et |
38 | Moderately Important. A measure of single-family housing. Weakness may lead to lower mortgage rates. |
| Weekly Jobless Claims | Thursday, Jan. 18, 8:30 am, et |
205K | Important. An indication of employment. Higher claims may result in lower rates. |
| Housing Starts | Thursday, Jan. 18, 8:30 am, et |
1.415M | Important. A measure of housing sector strength. Weakness may lead to lower rates. |
| Existing Home Sales | Friday, Jan. 19, 10:00 am, et |
3.82M | Low importance. An indication of mortgage credit demand. Significant weakness may lead to lower rates. |
| U of Michigan Consumer Sentiment | Friday, Jan. 19, 10:00 am, et |
68.8 | Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates. |
Year Ahead
Economic data is usually the number one reason mortgage interest rates move daily. Data is compiled from numerous sources and comes in two flavors, economic growth and inflation. Some releases are more important than others and thus are more likely to cause wider swings in mortgage rates. Rates move in relation to the deviation from expectations. We have significant releases all week. The potential for mortgage interest rate volatility is greater as a result. The recent short-term trend has been volatile amid mixed data. Future rate movements are likely, so caution is key.
