Daily Rate Lock Advisory

Indexes Affecting Rate Lock

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Fed Talk

While tomorrow doesn’t have any data for the markets to digest, Fed Chairman Powell will be speaking at an event that starts at 10:30 AM ET. He will be participating in a moderated discussion with a Harvard economics class at 10:30 AM ET in Cambridge, Massachusetts. This could start the week off with some volatility since there is little doubt inflation and the impact the Iran war is having on the economy are topics that will be discussed.

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Consumer Confidence Index

March's Consumer Confidence Index (CCI) at 10:00 AM ET Tuesday will start this week's economic releases. The Conference Board, who is a New York-based business research group and not a governmental agency, will post this index that tells us how confident consumers are about their own financial situations. Bond traders watch this data closely because consumers that feel better about their finances usually spend more and consumer spending makes up over two-thirds of the U.S. economy. Analysts are predicting a decline, bringing the index down to 88.0 this month from February's 91.2. A lower than predicted reading would be considered good news for mortgage rates.

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ADP Employment

Wednesday has three reports set for release, two of which are considered to be highly important. The day will start with March’s ADP Employment report at 8:15 AM ET. The payroll processor posts this report that tracks private-sector jobs gains or losses. As with any employment-related data, it will draw some attention, but many people feel this report is given more than it really deserves. Some people try to use it to predict the monthly government figures that follow a couple of days later, usually without success. Still, if it shows a noticeable variance from expectations, it will likely cause movement in the markets and mortgage rates. Forecasts are calling for it to show 42,000 new private-sector payrolls. Good news for rates would be a much smaller number.

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Retail Sales

February's Retail Sales data will follow at 8:30 AM ET Wednesday after being delayed by the government shutdown. This highly important report will give us insight about consumer spending that makes up such a large part of the U.S. economy. This month's report is expected to show a rise in sales of 0.4%, indicating consumers are still spending and fueling economic activity. If it reveals a larger increase, the bond market will likely respond negatively, pushing mortgage rates higher. Weaker than expected spending numbers could lead to lower rates Wednesday morning.

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ISM Index (Institute for Supply Management)

The Institute for Supply Management (ISM) will release their March manufacturing index at 10:00 AM ET that surveys manufacturing executive sentiment about business conditions. It can have also a noticeable impact on the financial markets and mortgage rates if it varies greatly from forecasts, but likely not as strong as the sales data. Analysts are expecting it to decline slightly from February's 52.4. Any reading above 50.0 is a sign of growth in the sector, so the lower the number, the better the news for rates.

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Holiday Schedule

The bond market will close at noon ET Thursday ahead of the Good Friday holiday, remaining closed until Monday morning. Stocks will trade a full day Thursday but will also be closed Friday. Even though the only scheduled data is the weekly unemployment update, we have to be prepared for some volatility Thursday morning. This is common during extended holiday closings, particularly three and a half day closings like this week. Investors may liquidate holdings to protect themselves from Iran headlines and other potential geopolitical news over the holiday weekend. Unfortunately, that is much more likely to have a negative impact on rates than a positive influence.

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Employment Situation

Since Good Friday is not considered to be a federal holiday, we will still get the almighty governmental Employment report at 8:30 AM ET Friday. Some of the important readings it will give us are the unemployment rate, the number of new jobs added or lost during the month and the average hourly earnings change. The best combination for the bond market and mortgage rates would be an increase in the unemployment rate, a much smaller payroll number than expected and little or no increase in earnings. Current forecasts are calling for a 0.1% increase from February's unemployment rate of 4.4%, approximately 48,000 new jobs added to the economy and a 0.4% rise in earnings. Stronger than expected readings will be bad news for rates. Some lenders may not issue new pricing Friday since the bond market is closed, meaning we may not see a full response to the report until Monday morning’s rates.

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Overall, Wednesday is a good candidate to see the biggest move in rates with two of the more important reports we get each month being released. Friday’s release of the Employment report is also a major event, but with the bond market closed and have been open only a half day Thursday, many lenders may not be issuing new rates until Monday morning. No day stands out as a good choice for calmest even though Thursday doesn’t have any major data because the early close for the bond market will likely fuel volatility before the closing. There isn’t much to be optimistic about in terms of mortgage rates moving lower this week, so please proceed cautiously if still floating an interest rate and closing in the near future.

Rate Lock Advisory

Mortgage Rate Trend

Indexes Affecting Rate Lock

Fed Talk

Consumer Confidence Index

ADP Employment

Retail Sales

ISM Index (Institute for Supply Management)

Holiday Schedule

Employment Situation

none

Float / Lock Recommendation