Data will be plentiful, with key reports on retail sales, inflation and housing.
- Inflation data from the Consumer Price Index will be released on Tuesday, followed by the Producer Price Index on Wednesday.
- The Retail Sales report will also be released on Wednesday.
- From the manufacturing sector, the Philadelphia Fed and Empire State Indexes will be released on Thursday.
- Look for weekly Initial Jobless Claims on Thursday as well.
- In the housing sector, the NAHB Housing Market Index will be released Thursday, while Friday brings Housing Starts and Building Permits.
Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve. In contrast, strong economic news normally has the opposite result. The chart below shows Mortgage Backed Securities (MBS), which are the type of Bond on which home loan rates are based.
When you see these Bond prices moving higher, it means home loan rates are improving. When Bond prices are moving lower, home loan rates are getting worse.
To go one step further, a red “candle” means that MBS worsened during the day, while a green “candle” means MBS improved during the day. Depending on how dramatic the changes are on any given day, this can cause rate changes throughout the day, as well as on the rate sheets we start with each morning.
As you can see in the chart below, Mortgage Bonds continue to trade in a sideways pattern. Home loan rates have trended higher this year but remain historically attractive.