Saturday, April 10, 2021


Updated on April 9, 2021 10:03:39 AM EDT

This morning’s only relevant economic data was Marchs Producer Price Index (PPI) that showed inflationary pressures at the manufacturing level of the economy spiked much more than predicted. The overall reading came in at up 1.0%, while the more important core data that excludes volatile food and energy prices jumped 0.7%. Both readings were well above forecasts of up 0.5% and 0.2% respectively. These readings are clearly bad news for bonds and mortgage rates because rapidly rising inflation makes long-term bonds, such as mortgage securities, less attractive to investors. That leads to higher yields and increases to mortgage rates.

Next week’s calendar is much busier than this week with a couple of highly important reports, a batch of moderately relevant releases and two Treasury auctions that can influence afternoon trading. There is at least one event scheduled each day, including Monday when a 10-year Treasury Note auction will be held. Look for details on next week’s calendar in Sunday evening’s weekly preview.

 ©Mortgage Commentary 2021