Monday, March 26, 2012

Market Update


I want to thank Josh Hay at US Bank for sending this update.


  MARKET COMMENT
Mortgage bond prices finished the week higher helping mortgage interest rates improve. Rates were positive Monday morning but quickly whipsawed higher Monday afternoon and Tuesday morning. Trading swung back positive again Wednesday and Thursday following weaker than expected existing home sales data and reports that Chinese manufacturing weakened.
Oil prices bounced around initially falling on consumption worries tied to the Chinese weakness, which eased some of the recent inflation fears. Prices spiked a bit higher Friday afternoon following reports that Iranian oil exports fell. Mortgage interest rates finished the week better by about 1/4 to 3/8 of a discount point despite the tremendous volatility.
LOOKING AHEAD
Economic
Indicator
Release
Date and Time
Consensus
Estimate
Analysis
Consumer ConfidenceTuesday,
March 27,
10:00 am, et
70.5Important. An indication of consumers' willingness to spend. Weakness may lead to lower mortgage rates.
Treasury Auctions BeginTuesday,
March 27,
1:15 pm, et
NoneImportant. 2Y Notes on Tuesday, 5Y Notes on Wednesday, and 7Y Notes on Thursday.
Durable Goods OrdersWednesday,
March 28,
8:30 am, et
Up 2.2%Important. An indication of the demand for “big ticket” items. Weakness may lead to lower rates.
Weekly Jobless ClaimsThursday,
March 29,
8:30 am, et
352kImportant. An indication of employment. Higher claims may result in lower rates.
Q4 GDP Third EstimateThursday,
March 29,
8:30 am, et
Up 3%Important. The aggregate measure of US economic production. Weakness may lead to lower rates.
Personal Income and OutlaysFriday,
March 30,
8:30 am, et
Up 0.3,
Up 0.4%
Important. A measure of consumers' ability to spend. Weakness may lead to lower mortgage rates.
PCE Core InflationFriday,
March 30,
8:30 am, et
Up 0.1%Important. A measure of price increases for all domestic personal consumption. Weaker figure may help rates improve.
U of Michigan Consumer SentimentFriday,
March 30,
10:00 am, et
74Important. An indication of consumers' willingness to spend. Weakness may lead to lower mortgage rates.
INCOME & OUTLAYS
The personal income and outlays release is a monthly report issued by the Bureau of Economic Analysis (BEA). The data is important because it is thought to provide a solid indication of future consumer demand. The personal income component is primarily a measure of wages and salaries. The outlays component is primarily a measure of spending on goods and services. Together the figures provide analysts valuable insight into consumer economic standing and consumption.
The prior release showed an income increase but not as much as analysts expected. Generally stagnant wages coupled with tighter borrowing restrictions make it difficult for consumers to spend money. It is important to note that no single economic indicator can consistently predict the future of the economy. However, the personal income and outlays report is a closely watched release. The consumer remains a vital component of the US economy.
The data this week has the potential to cause mortgage interest rate volatility. Now is a great time to take advantage of low rates.
RATE LINK is provided by Market Information for Mortgage Professionals. Copyright 2012. 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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