Mortgage Rates Sideways Even With a Slightly Better Than Anticipated CPI Report
Mortgage rates are moving sideways so far today. The recent trading range that has held the bellwether
10yr generally between 2.32% and 2.40% is still intact, even though it has
tested the upper end three times in the last few days. Stock indexes continue to lead the way. Most people know who read this usually sees
that when the market improves, the rates increases, and vice versa. Currently at 11:00AM, we see MBSs in negative
territory and pressure on the 10yr at 2.36% - so I guess when you look at the
indexes… sure enough, they are up.
The October Headline Consumer Prices Index YOY hit
2.0% vs est of 2.0%. So, the 2.8% PPI rate did not flow through to consumer
prices. The more closely watched Core CPI YOY came in a tick higher than
expected (1.8% vs est of 1.7%) but remains below the 2.0% threshold.
The Retail Sales data was better than expected. The
Headline October reading came in at 0.2% vs est of 0.0%. But more importantly,
the September data was revised higher from 1.6% to 1.9%.
Early this morning, we saw that Weekly Mortgage
Applications saw a nice movement higher of 3.1% which was a led by a large jump
of 6.0% in Refinance Applications. Purchases improved by 0.4%.
What will happen next month with the Feds? Chicago Fed
President Charles Evans (voting member) said he will go into the December FOMC
meeting with an "open mind" and that he is still concerned about low
inflation and the number of vacant spots on the board. Eric Rosengren
(non-voting member) will be giving his rhetoric this afternoon.
We are seeing oil prices lower this morning as oil
inventories are thought to show an increase in inventories, and that the US crude
inventories rising after a gloomy week.
Today, I am anticipating mortgage rates will likely stay
in the same basic range with little volatility. Anything unexpected with tax
reform could cause mortgage rates volatility.
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