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Market Commentary

Updated on November 12, 2019 10:21:43 AM EST

There is nothing of importance being released today. The rest of the week brings us the release of only four pieces of economic data that likely will affect mortgage rates. However, most of what is scheduled for release is considered to be highly important. There also is a batch of Fed member speaking engagements scheduled this week, including two by Fed Chairman Powell to congress.

October's Consumer Price Index (CPI) will start this week's activities early tomorrow morning. The CPI measures inflationary pressures at the consumer level of the economy and is one of the most important reports the bond market sees each month. If it reveals stronger than expected readings, indicating that inflationary pressures are rising at the consumer level, the bond market will probably react negatively and cause mortgage rates to move higher. Analysts are expecting to see a 0.3% increase in the overall reading and a 0.2% increase in the core data. The core reading is the more important of the two because it excludes more volatile food and energy prices.

This week's congressional testimony by Fed Chairman Powell will take place tomorrow and Thursday mornings. These events always take centerstage as market traders watch his prepared words and the question and answer session that follows. They are looking for any tidbits about the Fed's thought process on future monetary policy moves (or lack of). Whenever the Fed appears before congress, we can expect to see some volatility in the markets. He will be appearing during late morning hours both days, so expect to see a reaction before noon.

Overall, tomorrow is the best candidate for most important day of the week due to the significance of the CPI release and Fed Chair Powell's testimony taking place the same morning. Although, Friday could be active also with the retail sales report having the potential to heavily influence the markets. Also worth noting is the public impeachment hearings set to start tomorrow. These should not directly impact bonds or mortgage rates at this time, but as the process proceeds it will be interesting to see if they come into play. With so much going on this week, it would be prudent to watch the markets if still floating an interest rate and closing in the near future as they may be volatile multiple days.

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