Retail sales, trade, and Brexit hanging over the rate markets this week

___

Published Date 6/10/2019

This Week's Mortgage Rate Summary

How Rates Move:

Conventional and Government (FHA and VA) lenders set their rates based on the pricing of Mortgage-Backed Securities (MBS) which are traded in real time, all day in the bond market. This means rates or loan fees (mortgage pricing) moves throughout the day, being affected by a variety of economic or political events. When MBS pricing goes up, mortgage rates or pricing generally goes down. When they fall, mortgage pricing goes up.

Rates Currently Trending: Neutral

Mortgage rates are trending sideways so far today. Last week the MBS market improved by +13 bps. This caused rates to remain very low. Rates experienced relatively low volatility.

This Week's Rate Forecast: Neutral

Three Things: These are the three areas that have the greatest ability to impact rates this week. 1) Geopolitical/Trade, 2) Domestic and 3) Across the Pond

1) Geopolitical: Lots to focus on this week. British PM May is gone, and later this week we might know who her replacement will be and/or have another round of elections.....the results of which will determine how (and if) Great Britain leaves the EU and in what form. Trade continues to be front and center. While the Mexican immigration punitive tariffs have been put on hold, they are not gone. Mexico has pushed hard to meet the U.S. demands, but if they fizzle out in their border enforcement, then those tariffs will be back. On the Chinese front, there is much speculation on if Trump will meet with Xi at the upcoming G20 meeting. Meanwhile, both sides continue to ramp things up with another round of a new $300B in tariffs hitting next week.

2) Domestic: The biggest reports of the week will be Wednesday's YOY Consumer Price Index Ex-food and energy which has been hovering around 2.1%. Any increase in that level would be negative for your rates and will be interesting to see if there are any upward pressure due to tariffs which we have not seen yet. Friday's Retail Sales will also be watched very closely.

3) Across the Pond: We have some very key releases this week which have the gravitas to move rates:

China: Trade Balance, PPI, CPI, Retail Sales, Industrial Production, and an NBS Press Conference.
Japan: Industrial Production
Germany: CPI & Wholesale Prices
Great Britain: GDP & Unemployment Rate
Eurozone: ECB President Draghi Speech

Treasury Auctions this Week

06/10 3 year note
06/11 10 year note
06/12 30 year bond

This Week's Potential Volatility: Average

Rates have a lot to pay attention to this week. Between the economic news and geopolitical concerns denoted above, rates have the potential to see a good deal of volatility if something unexpected occurs.

Bottom Line:

If you are looking for the risks and benefits of locking your interest rate in today or floating your loan rate, contact your mortgage professional to discuss it with them.

Source: TBWS

All information furnished has been forwarded to you and is provided by thetbwsgroup only for informational purposes. Forecasting shall be considered as events which may be expected but not guaranteed. Neither the forwarding party and/or company nor thetbwsgroup assume any responsibility to any person who relies on information or forecasting contained in this report and disclaims all liability in respect to decisions or actions, or lack thereof based on any or all of the contents of this report.

Equal Housing Opportunity

Mortgage Solutions Group, PLLC NMLS #181064 | Powered By Xpert Home Lending, Inc. NMLS #2179191

States Licensed In:

AL 23249, AR 129623, AZ 1037959, CA DRE 02166758, CA DFPI DBO-1605250, CO 2179191, CN MCL-2179191, DC MLB2179191, DE 039059, FL MLD2250, GA 2179191, ID MBL.2082179191, IL MB.6761726, KS MC.0025868, MD 2179191, MI FL0024365, MI SR0024420, MN MN-MO-2179191, NE 2179191, NC L-211751, NJ 2179191, NM 2179191, OH RM.804928.000, OK ML015396, OR 2179191, PA 103794, SC DCA 2179191, TN 2179191, TX SML 2179191, VA MC-7517, WA CL-2179191, WI 2179191BA, WI 2179191BR, WY 4889

NOTICE TO TEXAS CONSMERS: CONSUMERS WISHING TO FILE A COMPLAINT AGAINST A MORTGAGE BANKER OR A LICENSED MORTGAGE BANKER RESIDENTIAL MORTGAGE LOAN ORIGINATOR SHOULD COMPLETE AND SEND A COMPLAINT FORM TO THE TEXAS DEPARTMENT OF SAVINGS AND MORTGAGE LENDING, 2601 NORTH LAMAR, SUITE 201, AUSTIN, TEXAS 78705. COMPLAINT FORMS AND INSTRUCTIONS MAY BE OBTAINED FROM THE DEPARTMENT’S WEBSITE AT WWW.SML.TEXAS.GOV. A TOLL-FREE CONSUMER HOTLINE IS AVAILABLE AT 1-877-276-5550. THE DEPARTMENT MAINTAINS A RECOVERY FUND TO MAKE PAYMENTS OF CERTAIN ACTUAL OUT OF POCKET DAMAGES SUSTAINED BY BORROWERS CAUSED BY ACTS OF LICENSED MORTGAGE BANKER RESIDENTIAL MORTGAGE LOAN ORIGINATORS. A WRITTEN APPLICATION FOR REIMBURSEMENT FROM THE RECOVERY FUND MUST BE FILED WITH AND INVESTIGATED BY THE DEPARTMENT PRIOR TO THE PAYMENT OF A CLAIM. FOR MORE INFORMATION ABOUT THE RECOVERY FUND, PLEASE CONSULT THE DEPARTMENT’S WEBSITE AT WWW.SML.TEXAS.GOV.”