Daily Rate Lock Advisory

Indexes Affecting Rate Lock

Medium

Unknown

Factory Orders

March's Factory Orders report will begin this week's economic calendar at 10:00 AM ET tomorrow morning. This data is similar to the Durable Goods Orders report that was posted last week, except it includes orders for both durable and non-durable goods. It will give us a measurement of manufacturing sector strength but is considered to be only moderately important to the bond and mortgage markets. That is partly because a big portion of the data was already released with last week’s version, meaning it will likely have a minimal impact on tomorrow's mortgage rates. It is predicted to show a 0.5% rise in orders. Favorable results will be a decline in orders.

Medium

Unknown

ISM Service Index

The Institute for Supply Management (ISM) will post their April non-manufacturing index at 10:00 AM ET Tuesday. This is the sister release to last week's ISM manufacturing index and also known as their service index, measuring sentiment of business executives in the service sector rather than manufacturing. Forecasts have the index slipping from March's 54.0 to 53.8 last month. Good news for mortgage rates would be a weaker than predicted reading.

Low

Unknown

New Home Sales

Also late Tuesday morning will be the release of February and March’s New Home Sales data. This government shutdown delayed data gives us an indication of strength in the small portion of the housing sector that the Existing Home Sales report doesn’t cover. It tracks sales of newly constructed homes by U.S. region, but this report usually doesn’t have an impact on mortgage rates.

Medium

Unknown

ADP Employment

Wednesday brings us the first employment data of the week when the ADP private-sector Employment report is released at 8:15 AM ET. While it does draw attention, it is overrated and is not a true reflection of the broader employment picture. It also is not accurate in predicting results of the monthly government report that follows a couple days later. Still, because we do often see a reaction to the report, we should be watching it. Analysts are expecting it to show that approximately 80,000 private sector payrolls were added to the economy last month. A smaller number would be good news for rates.

Medium

Unknown

Productivity and Costs (Quarterly)

In addition to the weekly unemployment update, 1st Quarter Productivity and Costs data is also set for release at 8:30 AM ET Thursday. This information helps us measure employee productivity in the workplace. High levels of productivity allow for low-inflationary economic growth. This update will likely be a non-factor for rates though unless it shows a significant variance from forecasts. Productivity is expected to have improved 1.8% while labor costs reading rose 2.8%. Good news for mortgage pricing would be a stronger rate of productivity and a smaller increase in labor costs.

High

Unknown

Employment Situation

The most important economic release of the week is April's Employment report at 8:30 AM ET Friday, revealing the U.S. unemployment rate, the number of jobs added to the economy during the month and earnings data. This is an extremely influential report for the financial and mortgage markets. It is expected to show that the unemployment rate held at March’s 4.3% and that approximately 58,000 jobs were added during the month, while earnings rose 0.3%. A higher unemployment rate and a much smaller increase in the payroll and earnings numbers would be good news for bonds and rates because they would indicate weaker than thought conditions in the employment sector of the economy. Stronger than expected results will probably lead to bond selling, possibly causing a sizable increase in mortgage pricing Friday.

Medium

Unknown

Univ of Mich Consumer Sentiment (Prelim)

May's preliminary reading to the University of Michigan's Index of Consumer Sentiment will close out this week's calendar at 10:00 AM ET Friday. This index shows consumer willingness to spend, which relates to actual consumer spending. If consumers are more confident in their own financial situations, they are more apt to make large purchases in the near future. It is expected to show a reading of 49.5, down from April's final reading of 49.8, meaning consumers are a little less confident than last month. If it shows a larger decline in confidence, bond prices could rise and mortgage rates may move slightly lower because waning confidence usually translates into softer consumer spending that restricts overall economic growth.

Low

Unknown

Fed Talk

Also worth noting is that now that the FOMC meeting is behind us, members of the Fed are allowed to speak publicly again about topics such as monetary policy and the economy. These individual speeches may yield opinions about future monetary policy moves in much more detail than the official FOMC statement showed last week. There is at least one of these speeches scheduled each day of the week with them set for all hours throughout the day. However, most of the topics listed are mundane and not related to key short-term rates and are not likely to yield anything relevant to mortgage rates.

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Unknown

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Overall, Friday is the most important day for rates due to the significance the Employment report carries, but we could see a sizable move in pricing multiple days. Thursday is a good candidate for calmest day. We should see plenty of headlines and movement in bonds that cause changes to rates this week. Therefore, please keep a close eye on the markets if still floating an interest rate and closing in the near future.

Rate Lock Advisory

Mortgage Rate Trend

Indexes Affecting Rate Lock

Factory Orders

ISM Service Index

New Home Sales

ADP Employment

Productivity and Costs (Quarterly)

Employment Situation

Univ of Mich Consumer Sentiment (Prelim)

Fed Talk

none

Float / Lock Recommendation