Indexes Affecting Rate Lock

Medium

Negative

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

Yesterday’s 5-year Treasury Note auction did not go very well. The benchmarks we use to gauge investor demand in the sale showed what could be considered little interest in the securities. Once results were posted at 1:00 PM ET, bonds gave back some of the earlier gains, but not enough to reverse the intraday improvement in rates that already showed. Those results also prevent us from being too optimistic about today’s 7-year Note sale. If the 1:00 PM results show another weak sale, we may see further losses this afternoon.

Medium

Negative

Weekly Unemployment Claims (every Thursday)

None of this morning’s three reports gave us favorable results that could have helped offset the overnight selling in bonds. Last week’s unemployment figures revealed only 730,000 new claims for benefits were filed, down from the previous week’s revised 841,000 initial filings. Declining claims is a sign of employment sector strength, making the data bad news for bonds and mortgage rates.

High

Negative

Durable Goods Orders

January's Durable Goods Orders showed a 3.4% rise in new orders at U.S. factories for items expected to last three or more years, exceeding forecasts of a 1.2% rise. Large swings are common in this data, so the variance isn’t as relevant here as it would be in other reports. Still, it is a sign that the manufacturing sector was stronger last month than in December and in better shape than many had thought. Accordingly, we must label this report as bad news for mortgage rates.

Medium

Neutral

GDP Rev 1 (month after initial)

The third release of the morning was the first revision to the 4th Quarter Gross Domestic Product (GDP) that came in with 4.1% annual rate of growth. In other words, the economy grew at a solid pace during the last three months of the year. That increase did not come as a surprise and was close to the previous estimate of 4.0%. This is why the markets have had no reaction to the news.

Medium

Unknown

Personal Income and Outlays

Tomorrow has two economic reports scheduled that may influence rates. January's Personal Income and Outlays report at 8:30 AM ET will be first. This data gives us an indication of consumer ability to spend and current spending habits. Current forecasts call for an increase in income of 9.5%, driven by economic stimulus payments that came during the month. Spending is expected to have risen 2.2%. Rising income means consumers have more money to spend. And stronger levels of consumer spending help fuel overall economic growth, making long-term securities such as mortgage-related bonds less attractive to investors. This report also contains a key inflation reading that the Fed relies on during their FOMC meetings. Accordingly, the weaker the readings, the better the news it would be for mortgage rates.

Medium

Unknown

University of Michigan Consumer Sentiment (Rev)

The University of Michigan's revision to their Index of Consumer Sentiment for February will close out the week's calendar at 10:00 AM ET tomorrow morning. Forecasts show this index coming in at 76.4. It is fairly important because it helps us measure consumer confidence that translates into consumer willingness to spend, but it is not considered to be a major market mover. A large decline would be considered good news for rates.

Rate Lock Advisory

Mortgage Rate Trend

Indexes Affecting Rate Lock

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

Weekly Unemployment Claims (every Thursday)

Durable Goods Orders

GDP Rev 1 (month after initial)

Personal Income and Outlays

University of Michigan Consumer Sentiment (Rev)

Float / Lock Recommendation