Daily Rate Lock Advisory

Indexes Affecting Rate Lock

Medium

Positive

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

Yesterday’s 10-year Treasury Note auction went pretty well with the benchmarks indicating a strong demand from investors. The announced results were favorable for the broader bond market and caused a slight improvement when they were posted at 1:00 PM ET. However, bonds soured during later afternoon trading, leading some lenders to issue an intraday upward revision to mortgage rates. This move doesn’t appear to be related to the auction though. The strong interest in yesterday’s sale allows us to be optimistic about today’s 30-year Bond auction. If the 1:00 PM results show another good auction, we may see bonds and mortgage rates improve during early afternoon trading.

High

Positive

Producer Price Index (PPI)

July's Producer Price Index (PPI) that was released at 8:30 AM ET this morning followed suit of yesterday’s CPI by showing weaker than expected readings. Today’s report revealed a 0.5% decline in the overall reading and a 0.2% rose in the more important core data that excludes volatile food and energy prices. Forecasts showed a 0.3% increase in the overall reading and a 0.4% rise in the core data. Today’s data indicates inflationary pressures at the producer level of the economy were softer than thought, making the report more good news for bonds and mortgage rates.

Low

Neutral

Weekly Unemployment Claims (every Thursday)

Also posted this morning was last week’s unemployment figures that showed 262,000 new claims for benefits were filed during the week. This was an increase from the previous week’s revised 248,000 initial filings, making the data slightly favorable for rates. However, the previous week now shows a downward revision, creating an increase in last week’s numbers. The total number of claims last week nearly pegged expectations, allowing us to label the report as neutral for bonds and mortgage pricing.

Medium

Unknown

Univ of Mich Consumer Sentiment (Prelim)

Closing out the week's calendar tomorrow morning will be the University of Michigan's Index of Consumer Sentiment for August at 10:00 AM ET. This report will give us an indication of consumer confidence, translating into consumer willingness to spend. If a consumer's confidence in their own financial and employment situation is rising, they are more apt to make large purchases in the near future. But, 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, impacts the financial markets. It is expected to show a minor increase from July's 51.5, meaning confidence was a little stronger this month than last and that surveyed consumers are more likely to make a large purchase. Good news for mortgage rates would be a sizable decline.

Rate Lock Advisory

Mortgage Rate Trend

Indexes Affecting Rate Lock

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

Producer Price Index (PPI)

Weekly Unemployment Claims (every Thursday)

Univ of Mich Consumer Sentiment (Prelim)

Float / Lock Recommendation