Tuesday, January 15, 2019


Updated on January 15, 2019 10:14:24 AM EST

Decembers Producer Price Index (PPI) was posted at 8:30 AM ET this morning, giving us some insight into inflationary pressures at the producer level of the economy. The overall reading fell 0.2% while the core data that excludes volatile food and energy prices slipped 0.1%. Both readings were weaker than forecasts, indicating inflationary pressures at the manufacturing level were subdued last month. That is good news for bonds and mortgage rates because weaker signs of inflation make longer term securities more appealing to investors.

Also worth mentioning is a key vote taking place today in Britain about their proposed plan to exit the European Union. There are rumors that the vote may not pass parliament. If that is the case, it raises the possibility of Britain breaking away in March without an agreed upon plan in place. That would likely cause noticeable volatility in the markets as it would raise concerns about the impact on the global economy. In other words, a failed vote today should be taken as favorable news for mortgage rates, at least temporarily.

Tomorrow morning has no important economic data set for release, but the Federal Reserve will post their Beige Book at 2:00 PM ET tomorrow. This report is named simply after the color of its cover and details economic conditions throughout the U.S. by Fed region. Since the Fed relies heavily on this info during their FOMC meetings, its results can have a fairly big impact on the financial markets and mortgage rates if it reveals any surprises. Of particular interest is information regarding inflation, unemployment or future hiring. If there is a reaction to the report, it will come during mid-afternoon trading.

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