Consumer Price Index (CPI)
November's Consumer Price Index (CPI) is tomorrow’s only relevant economic data, coming at 8:30 AM ET. It is the sister release to today’s PPI, except it tracks inflationary pressures at the more important consumer level of the economy. It is expected to show no change in the overall reading while the core data is forecasted to show a 0.2% increase. This data is one of the most watched inflation indexes, which is extremely important to long-term securities such as mortgage related bonds. Rising inflation erodes the value of a bond's future fixed interest payments. It also allows the Fed to be more aggressive with short-term interest rate increases. That translates into falling bond prices and rising mortgage rates. Therefore, weak readings would be favorable for the bond market and mortgage shoppers.