Mortgage bond prices fell last week applying upward pressure on mortgage interest rates. Trading remained extremely volatile with daily swings of 3/8's in discount points a common occurrence. The economic data released was mixed with no clear indication of the direction of the US economy. The Federal Reserve met last week and the governing body indicated the pace of economic deterioration is slowing. For the week, interest rates rose by about 5/8's in discount points. The employment report to be released Friday will be the most significant data this week. Productivity data will be important also. Additional debt supply hits the market this week with the Fed auctioning $71 billion of 3, 10, and 30 year Treasuries. It will be interesting to see if the market can continue to absorb the additional debt. LOOKING AHEAD
|
Economic |
Release |
Consensus |
|
| 3-year Treasury Note Auction |
Tuesday, May 5, |
None | Important. Notes will be auctioned. Strong demand may lead to lower mortgage rates. |
| ADP Employment |
Wednesday, May 6, |
Down 643k | Important. An indication of the employment situation. Weakness may lead to lower mortgage rates. |
| 10-year Treasury Note Auction |
Wednesday, May 6, |
None | Important. Notes will be auctioned. Strong demand may lead to lower mortgage rates. |
| Preliminary Q1 Productivity |
Thursday May 7, |
Up 0.9% | Important. A measure of output per hour. Improvement may lead to lower mortgage rates. |
| 30-year Treasury Bond Auction |
Thursday, May 7, |
None | Important. Bonds will be auctioned. Strong demand may lead to lower mortgage rates. |
| Consumer Credit |
Thursday, May 7, |
Down $3..3 billion | Low importance.. A significantly large increase may lead to lower mortgage interest rates. |
| Employment |
Friday, May 8, |
Unemp. @ 8.9%, |
Very important.. An increase in unemployment or a larger decrease in payrolls may bring lower rates. |
Employment The employment report provides an abundance of information for almost every sector of the economy. Not only does the employment report give basic employment payroll statistics for the major working sectors, it also provides the average hourly earnings and the average workweek. Using this information provided by the Bureau of Labor Statistics (BLS) of the U.S. Department of Labor, economists estimate many other economic indicators such as industrial production, personal income, housing starts, and GDP monthly revisions. Since there is little data for economists to base their estimates on, the margin of error for the estimates tends to be high. As a result, the employment report can cause substantial market movements. The BLS compiles data from two unrelated surveys that they conduct, the household survey and the establishment survey, in order to complete the employment report. This explains why sometimes there is an unexpected divergence between the unemployment rate and payrolls figures each month. This week's employment data will provide valuable insight into the state of the economy. For more information on the governments new loan modification and mortgage refinancing plan visit http://www.affordablehomerefinanceonline.com
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