Headline September Retail Sales data beats expectations

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Published Date 10/17/2024

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 under pressure today. The MBS market improved by +6 bps yesterday. This was not enough to decrease mortgage rates or fees. The market experienced low volatility yesterday.

Today's Rate Forecast: Neutral

Retail Sales: The headline September Retail Sales data was higher than expected, 0.4% versus estimates of 0.3%, but it was Ex-Vehicles that really shot up 0.5% versus estimates of 0.1% (plus an upward revision to August). The Control Group (which feeds into GDP) rose from 0.3% to 0.7%.

Jobs: Initial Weekly Jobless Claims were lower than expected (241K versus estimates of 260K) and Continuing Claims increased to 1.867M.

Manufacturing: The October Philly Fed Manufacturing Survey was better than expected, 10.3 versus estimates of 3.0. September Industrial Production was lighter than expected, down -0.3% versus estimates of -0.2%. Same story with Capacity Utilization 77.5% versus estimates of 77.8%.

Central Banks: The ECB cut their Deposit Facility Rate by 25BPS to 3.25% which was expected. ECB President LaGarde said that their bias is on a meeting by meeting basis and will be based upon their inflation outlook and will remain "sufficiently restrictive."

Today's Potential Rate Volatility: Neutral

This morning markets are under pressure due to the morning economic data. Volatility has started at moderate levels but will likely become low 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

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