Retail sales weaker than expected

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Published Date 6/18/2024

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 moving sideways today. The MBS market worsened by -5 bps yesterday. This was not enough to increase mortgage rates or fees. The market experienced low volatility yesterday.

Today's Rate Forecast: Neutral

Retail Sales: We got much weaker than expected data with the headline number hitting only +0.1% versus estimates of +0.2%... not a huge miss but the prior month was revised lower from 0.0 down to -0.2%. Ex Autos, same story with Retail Sales contracting by -0.1% versus estimates of +0.2% and the prior month was revised lower to -0.1%. So, this now means that we have two consecutive months of negative readings on the Ex Autos data set. While this appears very week data, the Control Group showed just the opposite, surging from last month's -0.5% to +0.4% in May.

Manufacturing: May Industrial Production and Capacity Utilization will hit at 9:15 am ET today.

Treasury Auction: We have a very important 20Y Bond auction at 1 pm today.

The Fed: Will hear from Barkin, Williams, Kugler, Musalem, Goolsbee, Logan and Collins today.

Central Banks: The Reserve Bank of Australia kept their key interest rate at 4.35%.

Today's Potential Rate Volatility: Neutral

This morning markets are moving sideways ahead of the Treasury Auction. Volatility has started low but is expected to kick up 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.

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All rates, fees and programs are subject to change without notice.