Daily Rate Lock Advisory

Indexes Affecting Rate Lock

Medium

Unknown

Industrial Production and Capacity Utilization

First up is September's Industrial Production data at 9:15 AM ET tomorrow. This release will give us an indication of manufacturing strength by tracking output at U.S. factories, mines and utilities. Forecasts are showing a 0.2% rise in output from August's level, meaning that manufacturing activity strengthened a little last month. A larger increase in production would be negative for bonds and mortgage rates as it would indicate economic strength. A decline in output would be favorable for mortgage shoppers.

Low

Unknown

Housing Starts (New Residential Construction)

September's Housing Starts will be posted at 8:30 AM ET Tuesday. This Commerce Department report will probably not have a heavy impact on the bond market or mortgage rates. It gives us a measurement of housing sector strength and future mortgage credit demand by tracking construction starts of new homes but is usually considered to be of low importance to the financial and mortgage markets. It is expected to show a small increase in new home starts between August and September, pointing to strength in the new home portion of the housing sector. We need to see a significant surprise in this data for it to have a noticeable influence on mortgage rates.

Medium

Unknown

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

Wednesday morning doesn't have any morning economic releases we need to be concerned with, but there are two afternoon events that may cause a change in rates. First is the 20-year Treasury Note auction that has the potential to influence mortgage rates. If this sale is met with a strong demand from investors, particularly international buyers, bond prices may rise during afternoon trading. This could lead to an improvement in mortgage rates shortly after the results of the sale are posted at 1:00 PM ET. On the other hand, a lackluster interest in the securities may create selling in the broader bond market and lead to a slight upward revision to mortgage rates Wednesday afternoon.

Medium

Unknown

Fed Beige Book

The Federal Reserve's Beige Book report that summarizes economic activity through the eyes of business contacts within each Fed region is the second release. The Fed relies heavily on this data during their FOMC meetings when making monetary policy decisions, so look for a potential reaction during mid-afternoon afternoon trading. It probably will not cause a major sell off in the stock or bond markets, but the 2:00 PM ET release is still worth watching as it could draw enough of a reaction to change rates slightly.

Medium

Unknown

Existing Home Sales from National Assoc of Realtors

Thursday has two monthly reports set for release along with the weekly unemployment update. September's Existing Home Sales data will be posted at 10:00 AM ET. The National Association of Realtors will give us another indication of housing sector strength and mortgage credit demand by tracking home resales. It is expected to show an increase in sales, meaning the housing sector strengthened last month. That would be relatively bad news for the bond market since a stronger housing sector makes broader economic growth more likely and causes bonds to be less appealing to investors. Good news for rates would be a sizable decline in sales that points toward a weakening housing sector.

Medium

Unknown

Leading Economic Indicators (LEI) from the Conference Board

The week's calendar closes with September's Leading Economic Indicators (LEI) from the Conference Board, also late Thursday morning. This index attempts to predict future economic activity, particularly during the next three to six months. Current forecasts are calling for an increase of 0.5% from August's reading. The increase would mean the indicators are pointing towards stronger economic activity over the next several months. An increase of that size would not be of much concern to the bond and mortgage markets. A smaller rise, or a decline would be favorable to mortgage pricing.

Medium

Unknown

Corporate Earnings

Also worth noting is corporate earnings season gets into full swing this week, when a large number of big-named companies release their quarterly and annual earnings reports. Strong earnings are good news for stocks and bad news for bonds. Generally speaking, if earnings miss expectations, bonds should rally and mortgage rates should move lower. With plenty of them posting this week, stocks could have a heavy influence on bond trading and mortgage pricing.

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Unknown

None

Overall, no day stands out as a clear choice for most important of the week. Thursday is a possibility with two monthly releases and the weekly unemployment update all scheduled, but Wednesday afternoon could see some movement also. Friday is a decent candidate for calmest day for rates. Despite the lack of any key economic data being posted, there still are plenty of events scheduled during the week, meaning we could still see multiple days with a noticeable change in mortgage pricing.

Rate Lock Advisory

Mortgage Rate Trend

Indexes Affecting Rate Lock

Industrial Production and Capacity Utilization

Housing Starts (New Residential Construction)

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

Fed Beige Book

Existing Home Sales from National Assoc of Realtors

Leading Economic Indicators (LEI) from the Conference Board

Corporate Earnings

None

Float / Lock Recommendation