This week is packed with relevant economic releases, meaning we will likely see plenty of movement in the financial markets and mortgage rates. The data starts Tuesday morning with the release of May’s Retail Sales and Producer Price Index (PPI) reports. The sales data measures consumer spending, which is important to the bond market because consumer spending mak es up two-thirds of the U.S. economy. Analysts are expecting to see sales rose 0.1% last month. No change in sales, or better yet a drop in sales, would be good news for the bond market and could lead to lower mortgage rates Tuesday.

The second report of the day is May’s Producer Price Index (PPI), which helps us measure inflationary pressures at the producer level of the economy. There are two readings of this index, the overall and the core data. The core data is considered to be the more important of the two because it excludes more volatile food and energy prices. A large increase could raise fear in the bond market that inflation is a threat to the economy. This would not be good news for bond prices or mortgage rates since inflation erodes the value of a bond’s future fixed interest payments. Rising inflation causes investors to sell bonds, driving prices lower and mortgage rates higher. Analysts are expecting to see an increase of 0.5% in the overall index and a 0.2% rise in the core data.

Wednesday’s CPI report is the next piece of data scheduled for release this week. It is extremely important to the bond market and mortgage rates because it measures inflationary pressures at the consumer level of the economy. As with the PPI, there are two readings to this index- the overall and core data readings. The core data is the more important since it excludes more volatile food and energy prices. If Wednesday’s release reveals rapidly rising prices, the bond market will most likely tank and mortgage rates will rise sharply. However, if the release shows readings lower than +0.4% in the overall and +0.2% in the core data, we should see the bond market move higher and mortgage rates move lower.

Late Wednesday, the Federal Reserve will release its Beige Book. This data details economic conditions throughout the U.S. by region. It is relied upon heavily by the Federal Reserve during FOMC meetings when determining monetary po licy. If it shows slowing economic activity, the bond market may thrive and mortgage rates could drop shortly after the 2:00 PM ET release. If it reveals significant signs of improvement from the last release, we could see mortgage rates revise higher Wednesday afternoon.

Thursday’s only important release is May’s Industrial Production data. This report will be released at 9:15 AM and can also cause movement in the financial markets and mortgage rates. It measures output at U.S. factories, mines and utilities, giving us an important measurement of manufacturing sector strength. If it reveals that production is rising, concerns of manufacturing strength may come into play in the bond market. A decline would indicate that the manufacturing sector is weaker than expected and should help push mortgage rates lower. Current forecasts are calling for an increase of 0.2%.

The last report of the week is June’s preliminary reading to the University of Michigan Index of Consumer Sentiment. This index measures consumer willingness to spend and usually has a moderate impact on the financial markets. It is expected to show a reading of 79.0, which is a slight decline from last month’s final reading of 79.1. If it shows a larger decline in consumer confidence, bond prices will likely rise. This should lead to mortgage rates moving slightly lower Friday.

Overall, it is going to be quite a busy week for the financial markets. We will likely see changes to mortgage rates several days this week, with a possibility of seeing afternoon revisions at least one day, possibly more. I feel that Tuesday or Wednesday will be the most important days of the week due to the number of reports being released and the importance of that day’s data. Accordingly, this would be a very good week to maintain fairly constant contact with your mortgage professional.

If I were considering financing/refinancing a home, I would…. Lock if my c losing was taking place within 7 days… Lock if my closing was taking place between 8 and 20 days… Lock if my closing was taking place between 21 and 60 days… Float if my closing was taking place over 60 days from now… This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

a la mode