Weekly Market Update
MARKET COMMENT
Mortgage bond prices continued to rebound higher last week, which pushed mortgage interest rates lower. Stock gains kept mortgage bonds relatively in check but many of the data releases were very bond friendly. The core PCE inflation reading was unchanged compared to the slight increase expected by analysts. Q4 revised productivity rose 6.9%, much better than expected. Higher productivity means a company can produce more with less input helping to keep prices and thus inflation in check. Rates fell about 1/8 of a discount point for the week.
Expect stocks to factor into trading the early portion of the week with very little data on tap. The Treasury auctions will be the focus throughout the middle portion of the week. Strong foreign demand would likely help mortgage bonds also. The jobless figures and retail sales data will be the focus for the end of the week.
LOOKING AHEAD
| Economic Indicator |
Release Date and Time |
Consensus Estimate |
Analysis |
| 3-year Treasury Note Auction | Tuesday, March 9, 1:15 pm, et |
None | Important. $40 billion of notes will be auctioned. Strong demand may lead to lower mortgage rates. |
| 10-year Treasury Note Auction | Wednesday, March 10, 1:15 pm, et |
None | Important. $21 billion of notes will be auctioned. Strong demand may lead to lower mortgage rates. |
| Weekly Jobless Claims | Thursday, March 11, 8:30 am, et |
450k | Moderately important. An indication of the employment situation. A large increase may bring lower rates. |
| Trade Data | Thursday, March 11, 8:30 am, et |
$40.3 billion deficit |
Important. Affects the value of the dollar. A falling deficit may strengthen the dollar and lead to lower rates. |
| 30-year Treasury Bond Auction | Thursday, March 11, 1:15 pm, et |
None | Important. $13 billion of bonds will be auctioned. Strong demand may lead to lower mortgage rates. |
| Retail Sales | Friday, March, 12, 8:30 am, et |
Up 0.1% | Important. A measure of consumer demand. Weakness may lead to lower mortgage rates. |
| U of Michigan Consumer Sentiment | Friday, March, 12, 10:00 am, et |
73.6 | Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates. |
| Business Inventories | Friday, March, 12, 10:00 am, et |
Up 0.2% | Low importance. An indication of stored-up capacity. A significantly larger increase may lead to lower rates. |