Daily Rate Lock Advisory

Indexes Affecting Rate Lock

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Treasury Auctions (5,7,10,20,30 year)

Activities begin Wednesday afternoon when results of the day’s 10-year Treasury Note auction are announced at 1:00 PM ET. These auctions don't directly impact rates, but they do influence broader bond market sentiment. If there is a decent demand from investors, we should see strength in bonds during afternoon trading. However, a lackluster interest from investors- particularly international buyers, may cause rates to move higher. This process will be repeated Thursday when 30-year Bonds are auctioned.

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FOMC Meeting Minutes

Also Wednesday afternoon is the 2:00 PM release of the minutes from last month's FOMC meeting. These may move the markets or could be a non-factor, depending on what they show. One key point traders are looking for is how many more rate cuts the Fed will make over the next few meetings, especially at the remaining two of this year. The general consensus is that they will make a quarter-point reduction at both of those meetings. It is worth noting though, the last FOMC meeting was followed by revised economic predictions and a press conference with Fed Chair Powell. Therefore, the likelihood of seeing a significant surprise in the minutes is relatively low.

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Consumer Price Index (CPI)

Relevant monthly economic releases start Thursday morning with September's Consumer Price Index (CPI) at 8:30 AM ET. This report is extremely influential to the financial and mortgage markets because it tracks inflation at the consumer level of the economy. Analysts are predicting a 0.1% increase in the overall reading and a 0.2% rise in the more important core data that excludes more volatile food and energy costs. On an annual basis, the overall CPI is expected to have declined 0.2% to 2.3% while core data held at August’s 3.2% annual rate. Weaker readings that indicate inflation is easing would be very good news for bonds and mortgage rates.

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Producer Price Index (PPI)

Friday has two reports scheduled to be posted. First will be September’s Producer Price Index (PPI) at 8:30 AM ET. It is considered to be the sister release of Thursday’s CPI, giving us an indication of inflationary pressures at the wholesale level of the economy instead of the consumer level. We usually see a reaction to any surprises in this data, but consumer inflation generally has a larger impact on mortgage rates. Forecasts have the overall PPI rising 0.1% last month with the core reading up 0.2%. Again, signs that inflation is waning monthly and annually would be good news for mortgage rates.

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Univ of Mich Consumer Sentiment (Prelim)

This week’s economic calendar ends with the University of Michigan posting their Index of Consumer Sentiment for October at 10:00 AM ET Friday. It will give us an indication of consumer confidence, which helps us measure consumer willingness to spend. If a consumer is more confident in their own financial situations, they are more apt to make large purchases in the near future. On the other hand, if they are growing more concerned about their job security or finances, they probably will delay making that large purchase. This influences future consumer spending data and, therefore, can impact the financial markets. It is expected to show a reading of 70.3, meaning confidence was a bit stronger than September's 70.1. A decline would be considered favorable news for bonds and mortgage rates because waning consumer spending usually translates into slower economic growth.

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Overall, Thursday is clearly the most important day of the week for mortgage rates due to the significance of the consumer inflation data. Tuesday could be the calmest day for rates unless something unexpected happens. We should see a noticeable move in rates for the week, particularly the latter days. Accordingly, please keep an eye on the markets if still floating an interest rate and closing in the near future.

Rate Lock Advisory

Mortgage Rate Trend

Indexes Affecting Rate Lock

Treasury Auctions (5,7,10,20,30 year)

FOMC Meeting Minutes

Consumer Price Index (CPI)

Producer Price Index (PPI)

Univ of Mich Consumer Sentiment (Prelim)

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Float / Lock Recommendation