Updated on September 12, 2024 10:13:42 AM EDT
Yesterday’s 10-year Treasury Note auction went fairly well with more of the benchmarks showing a decent demand for the securities than those that did not. However, bonds had already started to slip long before the results were announced at 1:00 PM ET. There was a slight knee-jerk positive reaction to the results, but it was short-lived. The bottom line is the auction had little impact on mortgage rates even though there was some good news to come from the sale. We have today’s 30-year Bond auction to watch today with results also set to be posted at 1:00 PM ET. If there is a reaction it will likely come during early afternoon trading. A strong demand for the securities could lead to a small improvement in mortgage rates before the end of the day.
The first of this morning’s two economic releases was August’s Producer Price Index (PPI) at 8:30 AM ET. It nearly mimicked yesterday’s CPI version with the overall monthly reading rising 0.2% as expected and the core data rising 0.3% when it was predicted to increase 0.2%. Furthermore, the overall annual reading came in slightly below expectations and the annual core showed no surprises. Since the monthly core data was stronger than thought, we are seeing bonds react negatively this morning.
Also posted early this morning were last week’s unemployment figures that revealed 230,000 new claims for benefits were filed. This was a minor increase from the previous week’s revised 228,000 initial filings and matched expectations. Therefore, we can label it as neutral to slightly favorable for mortgage pricing because this is only a weekly snapshot.
Closing out this week’s calendar will be the University of Michigans Index of Consumer Sentiment for September at 10:00 AM ET tomorrow. This index gives us an indication of consumer confidence in their own financial and employment situations. If consumers are feeling better about their personal financial situation than last month, they are more apt to make large purchases in the near future. On the other hand, if they are growing more concerned about their job security or finances, they probably will delay making that sizable purchase. This influences future consumer spending data and therefore impacts the financial markets. It is expected to show a modestly stronger reading than Augusts 67.9. The lower the reading, the better the news for mortgage rates.
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