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A weekly look at where mortgage interest rates are headed. A weekly Economic Calendar is also included.

Market Commentary

At the end of last week, US stocks rose to push the S&P500 up 0.5% to a new high but US Treasuries made gains too, with 10Y yields down 3bps to 2.50%, while the dollar weakened somewhat. Those moves followed data showing that US GDP growth in Q1 beat expectations at 3.2%Q/Q annualized – to mark one of the strongest quarters of the past few years – but also that final private domestic demand was relatively subdued. Indeed, given the temporary factors that flattered the headline GDP figure, all expectations are that, when the Fed’s policy meeting concludes on Wednesday, the FOMC will be able to maintain its patient stance despite the recent strong performance of US stocks.

 Wednesday sees the release of the April manufacturing ISM and PMI reports along with March construction spending and April’s auto sales and ADP employment report. The highlight of the week will probably be Wednesday’s FOMC meeting. Regarding the FOMC meeting, there is virtually no prospect of a change in policy settings while the Bank’s ‘patient’ stance is very unlikely to have changed either. On Thursday the preliminary estimates for non-farm productivity and unit labor costs for Q1 will be released and the full factory orders report for March. On Friday wraps up with the April employment report, advance trade and inventory reports for March and non-manufacturing ISM and services PMI reports for April will be released.

Economic Calendar for the week of 04/29/2019 to 05/03/2019:

Monday: Personal Income, Personal Spending, PCE Core Deflator and Dallas Fed. Manufacturing
Tuesday: Employment Cost Index, S&P Core Logic, Pending Home Sales
Wednesday: MBA Mortgage Applications, ADP Employment Change, Markit US Manufacturing PMI, ISM Employment, ISM Prices Paid, ISM New Orders, Wards Total Vehicle Sales and FOMC Rate Decision
Thursday: Initial Jobless Claims, Continuing Claims, Bloomberg Consumer Comfort, Durable Goods Orders and Factory Orders
Friday: Wholesale Inventories, Retail Inventories, Change in Nonfarm Payrolls, Unemployment Rate Average Hourly Earnings, Labor Force Participation Rate, Unemployment Rate Markit Services PMI Markit Composite PMI and ISM Non-Manufacturing Index

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