This week brings us the release of five economic reports for the markets to digest. Only one of these reports is considered to be highly important to mortgage rates, but this by no means leads me to believe we will have an uneventful week. This will be an extremely busy week for corporate earnings, which usually translates into stock volatility. The lack of important economic data on this week's calendar makes it more likely that any significant swings in stock prices will influence bond trading and mortgage rates.
September's Producer Price Index (P PI) is the first report of the week and the most important of the five. This index measures inflationary pressures at the producer level of the economy. Analysts are expecting to see no change in the overall index and a 0.1% rise in the core data reading. The core data is the more important of the two because it excludes more volatile food and energy prices. A larger than expected increase could fuel inflation concerns in the bond market and push mortgage rates higher. However, weaker than expected readings should lead to lower rates Tuesday.
September's Housing Starts is the second report of the day, but is one of the week's least important pieces of data. It gives us an indication of housing sector strength and mortgage credit demand, but usually is not a mover of mortgage rates. It is expected to show an increase in starts of new homes last month. If it varies greatly from forecasts, we could see the bond market have some reaction to the news, but probably not enough to cause much movement in rates. The PPI report should be much more of an influence on mortgage rates Tuesday than this housing report will