Momentum trading and safe haven buying created a roller coaster-like week for mortgage rates last week.
This week, mortgage bonds should trade on data, by contrast.
Tuesday, at 8:30 A.M. ET, three important releases hit the wires:
- Producer Price Index (The cost of doing business)
- Industrial Production (How many goods are being produced?)
- Capacity Utilization (Can more goods be produced, if necessary?)
The first release reveals the cost to business to produce goods; the latter two reveal the volume of production and the stress its places on the economy overall.
Despite last Friday’s weak Retail Sales figure, markets remained unconvinced about inflation. So, together, these three releases will give some sense from a business perspective of whether the economy is shrinking or growing.
Mortgage rate shoppers would do good to lock their rates prior to Tuesday morning because the data may reveal anything and changes in rates have been very sudden lately.
Wednesday, we’ll get the Consumer Price Index — also a major inflationary gauge. Rates should dance around this release, too.
Then, amid a host of other data, Thursday main focus will be on the FOMC’s June 28 meeting minutes.
Once the data starts rolling in Tuesday, mortgage rates will close out the week based on the strength of data. Any numbers suggesting growth or increases will move rates higher; numbers suggesting weakness will push rates lower.
With so much data hitting the street, it may be best for rate shoppers to get locked in to a rate as soon as possible.