Updated on January 25, 2021 10:07:49 AM EST
There is nothing of relevance scheduled for release today, the only day of the week without at least one item. However, the rest of the week has eight monthly and quarterly economic reports that we will be watching, in addition to two Treasury auctions and an FOMC meeting. A couple of the reports are considered to be highly important while others are of moderate or low importance.
Januarys Consumer Confidence Index (CCI) will start the week’s activities at 10:00 AM ET tomorrow. This report is considered to be of moderate importance to the bond market and therefore, can move mortgage rates if it shows any big surprises. It is an indicator of consumer sentiment, which is important because waning confidence in their own financial situations is a sign that consumers are less willing to make large purchases in the near future. Since consumer spending makes up over two-thirds of the U.S. economy, market participants are very attentive to related data. Analysts are expecting to see a decline from Decembers reading, indicating consumer confidence was weaker this month than last month. A reading much smaller than the expected 88.5 would be ideal for the bond market and mortgage rates. A higher reading would mean that consumers are more likely to spend in the immediate future, fueling economic growth and possibly pushing mortgage pricing higher.
Tomorrow also has the first of this week’s two Treasury auctions that may slightly influence mortgage rates. 5-year Notes will be sold tomorrow, followed by 7-year Notes Thursday. Neither sale is likely to cause a big move in rates, but we could see the broader bond market react to the auctions enough to cause a small move in mortgage pricing. A strong demand for the securities could help lower rates. Results will be posted at 1:00 PM ET each day, so if there is a reaction it will come during early afternoon trading tomorrow.
Overall, Wednesday is the best candidate for most active day for rates due to the Durable Goods Orders data and the FOMC meeting adjournment. We may also see a noticeable move in pricing Thursday after the initial 4th Quarter GDP reading is posted. Don’t be surprised to see multiple days with intraday changes in pricing due to morning and afternoon events scheduled three days. Accordingly, it would be prudent to keep an eye on the markets if still floating an interest rate and closing in the near future.
©Mortgage Commentary 2021