Weekly Mortgage Overview: 7/5/2022

What Happened Last Week?

Rates Lowest in More Than a Week After Inflation Data

Inflation is the enemy of low interest rates. As such, the mortgage market was waiting patiently for this week’s key inflation report released this morning. Thankfully, it showed inflation was running a bit cooler than expected. Rates were already having a decent week due to other economic data both at home and abroad, but the inflation data added some momentum to the rally.
Continue reading: Matthew Graham, Mortgage News Daily 6/30/22)

What’s on the Agenda for this Week?

Three Things

The three areas that have the greatest ability to impact mortgage backed securities backend pricing this week are: (1) Jobs, Jobs, Jobs, (2) The Talking Fed and (3) ISM.

(1) Jobs, Jobs, Jobs: There is a ton of job and wage related data this week culminating with Big Jobs Friday. There will be JOLTS, Challenger Job Cuts, ADP Payrolls, Initial Weekly Jobless Claims, Non Farm Payrolls, Average Hourly Earnings, Unemployment Rate.

(2) The Talking Fed: The Minutes from the last FOMC meeting will be issued on Wednesday.

(3) ISM: The biggest economic data point outside of the deluge of jobs data is Wednesday’s ISM Non manufacturing.

Market Wrap-up

Domestic Flavor

Manufacturing: May’s Factory Orders were three times higher than expected (1.6% vs. estimates of 0.5%), plus April was revised upward significantly from 0.3% to 0.7%.

On Deck for Tomorrow: ISM Non Manufacturing, JOLTS, Minutes from last FOMC Meeting.

Central Bank Palooza

The Reserve Bank of Australia raised their interest rate by 50BPS from 0.85% to 1.35% which was widely expected.