Economic Calendar: What's happening this week, and what it may do to interest rates
This weeks Mortgage Market Movers
The beginning of the month always has the best Info that may move the market. Later this week we get a few of the "biggie" inflation numbers that the market will need to digest. But this has been a strange year and it is hard to call how the market will react to specific numbers. Things are slow in the economy, but just slight glimmers of hope, (and I am talking numbers reported that are dismal, just not as dismal as they could be) are making stocks happy and Credit markets unhappy. I expect more of the same for this week
Here is the List of Data for the week:
- Monday, May 11: No real reports other than the Fed purchase of Treasury obligations. This should be helpful in keeping rates steady and may help them drop a touch. As I type this the Stock market is doing poorly and we are seeing money flow into the credit markets.
- Tuesday: Day two of the Fed buying Treasuries, and no other info on the calendar
- Wednesday May 13: April Retail Sales expected Flat 0.0% Ex-Auto expected +0.2%. If we see a stronger than expected number it will be bad for rates. It is unlikely we will see weaker numbers, but if we do, it will be good news. (Don't forget: Bad news is good news for rates!)
- Wednesday: March Business Inventories, expected -1.0%. let's face it folks, Who Cares about inventories in March? Of course business is not stock piling stuff, that costs money! This is old news and not likely to even be looked at.
- Wednesday: Day 3 of the Fed buying Treasuries. This is part of the $300 Billion effort to keep control of interest rates.
- Thursday, May 14: Initial jobless claims expected up 9,000. At these levels, which are an improvement over previous weeks, we are not likely to see any movement.
- Thursday: April PPI, Expected +0.1% both for the headline and core rate. I was a little surprised to see a positive forecast on this number, last month was -1.2%. The forecast is considered a modest gain and not likely to move the market.
- Friday May 15: April CPI, expected -0.1% with a core of +0.1%. Gas prices were down for April but well up in may, that is the reason for the difference between the core and headline number. The core rate of inflation at the consumer level is holding at multi-month lows and will not have any impact on rates without a big surprise different than the forecast.
- Friday: April Industrial Production and Capacity Utilization, expected -0.6% and 68.8. Production is down again, but not as bad as in March. The market knows that things are slow, so these numbers come as no shock and will not be likely to move the market.
The good news this week is there are NO Treasury Auctions.That is a big plus. The excess supply in the market makes it difficult for rates to do anything but go up. This weeks Biggie will be Wednesday's Retail sales number. There has been an uptickin retail sales numbers that analysts are calling the "Circuit City Effect" which is a one time event where consumers run out and buy items at a discount. The next layer of the cake will be Tax Refund and Fiscal Stimulus checks that may cause a false picture of activity in the retail sector. If Wednesday's Retail numbers come in as expected (or worse better) the markets will think that the retail sector is improving at a sustainable rate. On that news stock will rally and steal from the credit markets driving rates up. However: if we see weaker than expected it is highly likely we will see a sell off in stocks which will help pump money into the credit markets and drive rates down. If Monday's activity in the stock market is any indication, we may be seeing a bit of profit taking that is good news for rates. It seems that there has been a bit of irrational exuberance in the stock market that many analysts are expecting to turn around to become a round of profit taking. But that has been the prediction for a few weeks now and we have not seen any serious moves there just yet.
That's This weeks humble opinion! I would guess that we will probably see another bouncy week with relatively flat rates by the end of the week.
Have a great week!
Rob
Mortgage Banker
www.RobertRaufHomeLoans.com or my blog: http://activerain.com/blogs/rrauf
(732)223-1630 x102
Since 1987 I have been helping my clients fulfill their dream of home ownership!
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