Monday, November 14, 2011

Market Update

I want to thank Josh Hay for sending these to me.  I think I'll be using them more often.


MARKET COMMENT
Mortgage bond prices ended lower last week, which pushed mortgage interest rates slightly higher. The early portion of the week was relatively tame compared to recent trading conditions. Most of the weakness came Thursday following stronger than expected weekly employment figures. Weekly jobless claims came in at 390k, better than the expected 400k mark and generally not bond friendly. Continuing claims came in at 3,615k, which also beat estimates. The reaction was negative and sent rates slightly higher ahead of the extended holiday weekend. Positive stocks also pressured rates at times throughout the week. Mortgage interest rates rose by approximately 1/4 of a discount point for the week.
LOOKING AHEAD
Economic
Indicator
Release
Date and Time
Consensus
Estimate
Analysis
Producer Price IndexTuesday,
Nov. 15,
8:30 am, et
Up 0.4%,
Core up 0.2%
Important. An indication of inflationary pressures at the producer level. Weaker figures may lead to lower rates.
Retail SalesTuesday,
Nov. 15,
8:30 am, et
Up 1.4%Important. A measure of consumer demand. A smaller than expected increase may lead to lower mortgage rates.
Business InventoriesTuesday,
Nov. 15,
10:00 am, et
Up 0.2%Low importance. An indication of stored-up capacity. A significantly larger increase may lead to lower rates.
Consumer Price IndexWednesday,
Nov. 16,
8:30 am, et
Up 0.3%,
Core up 0.1%
Important. A measure of inflation at the consumer level. Weaker figures may lead to lower rates.
Industrial ProductionWednesday,
Nov. 16,
9:15 am, et
Up 0.2%Important. A measure of manufacturing sector strength. A lower than expected increase may lead to lower rates.
Capacity UtilizationWednesday,
Nov. 16,
9:15 am, et
77.2%Important. A figure above 85% is viewed as inflationary. Weaker figure may lead to lower rates.
Weekly Jobless ClaimsThursday,
Nov. 17,
8:30 am, et
387kImportant. An indication of employment. Higher claims may result in lower rates.
Housing StartsThursday,
Nov. 17,
8:30 am, et
610kImportant. A measure of housing sector strength. Weakness may lead to lower rates.
Philadelphia Fed SurveyThursday,
Nov. 17,
10:00 am, et
6.8Moderately important. A survey of business conditions in the Northeast. Weakness may lead to lower rates.
Leading Economic IndicatorsFriday,
Nov. 18,
10:00 am, et
Up 0.2%Important. An indication of future economic activity. A smaller increase may lead to lower rates.
BUSINESS INVENTORIES
The report on business inventories basically gives a broader look at the durable goods, factory orders, and retail sales reports. Not only is this report an important part of the investment component of the GDP, but it also provides additional evidence about the economy in the upcoming months. Changes in business inventories slow as the economy approaches a peak, and rise as the economy approaches the trough of a recession. Therefore the change in business inventories is a leading indicator of GDP. The data for this report, which are published by the Department of Commerce's Census Bureau, comes from a monthly survey of inventories, orders, and manufacturers' shipments, in addition to the merchant wholesalers and retail trade surveys.
In this environment every piece of data has the potential to cause some volatility.
RATE LINK is provided by Market Information for Mortgage Professionals. Copyright 2011. All Rights Reserved. Mortgage Market Information Services, Inc. The information contained herein is believed to be accurate, however no representation or warranties are written or implied.

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