US industrial production jumps ahead in July

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Published Date 8/17/2017

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 moving sideways so far today.  The MBS market improved by +13 bps yesterday. This may've been enough to improve mortgage rates or fees.   The market experienced low moderate yesterday.

Today's Rate Forecast: Neutral

Jobs: Once again, the labor data is solid. Weekly Initial Claims were 232K vs. est of 240K. The more closely watched 4-week moving average fell to 240,500.

Manufacturing: We just got our second straight regional manufacturing report that beat estimates. The Philly Fed Manufacturing survey hit 18.9 vs. est of 18.5. Industrial Production for July hit 0.2% vs. est of 0.3% and Capacity Utilization matched market expectations of 76.7%.

Leading Indicators: The July Leading Economic Indicators rose by 0.3% which matched market expectations.

Fed: Today we hear from Dallas Fed President Robert Kaplan and Minneapolis Fed President Neel Kashkari.

Geopolitical: Did President Trump's Chief Economic Advisor Gary Cohn just quit? Rumors are all over social media right now, but none of them are confirmed by the White House.

Eurozone: Core CPI YOY hit 1.3% vs. est of 1.2%. Also, we got the Minutes from their last ECB meeting, and it showed that they were concerned with the Euro exchange rate overshooting their targets.

Today's Potential Rate Volatility: Average

Mortgage rates are likely to continue to move sideways for the rest of the day with average to low volatility. 

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.

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Daniel Harwood

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