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 heavily contributed to the afternoon bond gains. The 1:00 PM ET results announcement indicated a successful sale with most of the benchmarks pointing to a fairly strong demand from investors. The post-announcement move was enough for some lenders to make an intraday improvement to mortgage pricing before the end of the day. Many lenders likely opted to wait for this morning’s data before reflecting the afternoon gains.

High

Positive

Producer Price Index (PPI)

May's Producer Price Index (PPI) was released at 8:30 AM ET this morning, revealing wholesale inflation was also a tad softer than expected last night. This follows what its sister version (CPI) told us yesterday about consumer inflation. May’s overall PPI rose 0.1% when it was expected to be up 0.2%. The core data reading that excludes more volatile food and energy costs was up only 0.1%, falling short of the 0.3% increase that was predicted. April’s monthly readings were both revised to show smaller declines than previously announced, but we can still consider May’s numbers to be favorable for bonds and mortgage rates.

High

Positive

Producer Price Index (PPI)

Wholesale inflation on a year-over-year basis also gave us a bit of good news. The overall reading matched forecasts of a 2.6% annual pace, up from April’s 2.4% rate. The annual core data that carries a little more significance than the overall number slipped 0.1% from April’s 3.1% pace. Forecasts had it holding at April’s level. It is mostly the softer than expected annual core rate that makes the PPI release good news for rates.

Medium

Positive

Weekly Unemployment Claims (every Thursday)

Also released early this morning were last week’s unemployment figures. They showed 248,000 new claims for jobless benefits were made last week. This was a small increase from the previous week’s 247,000 initial filings and the highest weekly number since October of last year. The fact rising claims are a sign of weakness in the employment sector, combined with forecasts of a decline in claims, makes this report good news for rates also.

Medium

Unknown

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

We also have today’s 30-year Treasury Bond auction to watch. Results will be posted at 1:00 PM ET, making this another afternoon event for rates. If there is a similarly strong demand as there was in yesterday’s auction, we should see bonds improve during afternoon trading, possibly leading to a downward revision in mortgage rates. However, a weak sale could cause an increase in rates later today.

Medium

Unknown

Univ of Mich Consumer Sentiment (Prelim)

This week’s calendar closes late tomorrow morning with the release of June’s preliminary Index of Consumer Sentiment from the University of Michigan. It gives us a measure of consumer willingness to spend. Waning confidence in personal financial and employment situations usually translates into softer levels of consumer spending, restricting economic growth. A weaker reading than May's final 52.2 would be an indication that consumers are less confident in their own finances and be labeled good news for rates. Analysts are expecting to see it come in at 53.5, signaling stronger confidence this month than last month.

Rate Lock Advisory

Mortgage Rate Trend

Indexes Affecting Rate Lock

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

Producer Price Index (PPI)

Producer Price Index (PPI)

Weekly Unemployment Claims (every Thursday)

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

Univ of Mich Consumer Sentiment (Prelim)

Float / Lock Recommendation