Headline September Retail Sales data beats expectations

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Published Date 10/17/2024

Today'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 under pressure today. The MBS market improved by +6 bps yesterday. This was not enough to decrease mortgage rates or fees. The market experienced low volatility yesterday.

Today's Rate Forecast: Neutral

Retail Sales: The headline September Retail Sales data was higher than expected, 0.4% versus estimates of 0.3%, but it was Ex-Vehicles that really shot up 0.5% versus estimates of 0.1% (plus an upward revision to August). The Control Group (which feeds into GDP) rose from 0.3% to 0.7%.

Jobs: Initial Weekly Jobless Claims were lower than expected (241K versus estimates of 260K) and Continuing Claims increased to 1.867M.

Manufacturing: The October Philly Fed Manufacturing Survey was better than expected, 10.3 versus estimates of 3.0. September Industrial Production was lighter than expected, down -0.3% versus estimates of -0.2%. Same story with Capacity Utilization 77.5% versus estimates of 77.8%.

Central Banks: The ECB cut their Deposit Facility Rate by 25BPS to 3.25% which was expected. ECB President LaGarde said that their bias is on a meeting by meeting basis and will be based upon their inflation outlook and will remain "sufficiently restrictive."

Today's Potential Rate Volatility: Neutral

This morning markets are under pressure due to the morning economic data. Volatility has started at moderate levels but will likely become low later in the day.

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.