Weekly Mortgage Overview: 2/1/2021

By February 1, 2021Mortgage Overview

What’s on the Agenda for this Week?

Three Things

The three areas that have the greatest ability to impact backend pricing this week are: (1) Stimulation Nation, (2) Jobs, Jobs, Jobs and (3) Central Bank Palooza.

(1) Stimulation Nation: House Speaker Pelosi says that the House will shift gears and vote/pass a budget which includes $1.9T package later this week, which then could be handled as a budget reconciliation in the Senate instead of a flat out stimulus package vote. Meanwhile, Republican Senators have sent a letter to President Biden outlining a smaller and more targeted stimulus plan in the $600B to $1T range which they say they can move through the Senate.

(2) Jobs, Jobs, Jobs: There will be a ton of job and wage related data this week culminating in Big Jobs Friday. ADP Private Payrolls, Challenger Job Cuts, Initial Weekly Jobless Claims, Unit Labor Costs, Unemployment Rate, U6 Underemployment Rate, Average Hourly Earnings, Non Farm Payrolls and internal employment components of ISM Manufacturing and Non Manufacturing will all get plenty of attention from bond traders.

(3) Central Bank Palooza: The Bank of England will issue their latest interest rate decision and policy statement, their first since the Brexit agreement has been reached.

Talking Fed

There will be plenty of speeches from our Federal Reserve. Here is this week’s calendar:

02/01: Bostic, Rosengren
02/02: Williams, Mester
02/03: Bullard, Harker, Mester, Evans and Kaplan
02/04: Daly

Market Wrap-up

Domestic Flavor

Manufacturing: The January ISM Manufacturing PMI was quite strong, coming in at 58.7 vs. estimates of 60.0. Prices Paid really shot up and showed inflationary pressure with a 82.1 reading.

Construction Spending: The December reading edged out estimates with a 1.0% vs. 0.9% reading.

On Deck for Tomorrow: Economic Optimism, NY Fed President Williams speech.