January retail sales data lower than expected

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Published Date 2/15/2024

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 getting support today. The MBS market improved by +25 bps yesterday. This may have been enough to decrease mortgage rates or fees. The market experienced moderate volatility yesterday.

Today's Rate Forecast: Neutral

Retail Sales: The headline January Retail Sales report was a big miss to the downside, down -0.8% versus estimates of -0.1%. Ex Autos, they were down -0.6% versus estimates of +0.2% and the Control Group (which feeds into GDP) moved from +0.4% in December down to -0.6% in January.

Jobs: Initial Weekly Jobless Claims were 212K versus estimates of 220K. The more closely watched 4 week moving average moved up to 218K. Continuing Claims were 1.895M versus estimates of 1.880M.

Manufacturing: We got two regional Fed reports today and both were better than expected. Feb Philly Fed Manufacturing Survey +5.2 versus estimates of -8.0. Empire Manufacturing Index -2.4 versus estimates of -15.0. January Industrial Production hit -0.1% versus estimates of 0.3% and Capacity Utilization 78.5% versus estimates of 78.8%.

Import/Export: Import Prices rose by +0.8% in January versus estimates of flat at 0.0%. Export Prices also rose by +0.8% versus estimates of -0.1%.

Housing: The NAHB Home Builders Sentiment Index was better than expected, 48 versus 46.

The Fed: Today we will hear from Fed Governor Waller.

Today's Potential Rate Volatility: High

This morning markets are getting a boost on the economic data and some rumblings on geopolitical concerns. Volatility has started high with world events a factor going forward.

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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