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Sunday, July 12, 2020

Market Commentary

Updated on July 10, 2020 10:08:06 AM EDT

Yesterday’s 30-year Treasury Bond auction followed suit of Wednesday’s sale with a strong demand from investors. Mortgage and Treasury bond prices had already improved from early morning levels by the time results were posted at 1:00 PM ET. But once they were released, we saw another move higher. That eventually led to many lenders revising rates lower before the end of the day.

Today’s sole relevant economic report was Mays Producer Price Index (PPI) at 8:30 AM ET that revealed a 0.2% decline in the overall reading and a 0.3% decline in the core data. Both readings were well below expectations, indicating inflationary pressures at the producer level of the economy (manufacturing) were much softer than expected. Since bonds tend to thrive when inflation is weak, we can consider this data good news for mortgage rates.

Next week brings us many more economic releases than we got this week, including one that is considered highly relevant and another that is extremely important. The events that will be most watched come during the middle days of the week. Monday has nothing scheduled that we need to be concerned with, leaving weekend news and stocks to drive trading as the new week begins. Look for details on all of next week’s activities in Sunday evening’s weekly preview.

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