Last week certainly had its ups and downs, we lost a little bit of ground last week, mostly in a sell off on Thursday, but we are still lower than the highs we had just a week or two ago.  So far the absence of any data this Monday has shaped up to be a pretty decent day in the Mortgage world, and between Friday and today we have gained back about 2/3 of the loss we had on Thursday.

This week is a big mix of data that will probably play out fairly well, but between the Fed meeting and the excess supply (in the form of $104 billion in treasuries being auctioned) there is room for a hic-up or two along the way.

Here is this week's Calender:

• Monday June 22, A no News day.
• Tuesday, June 23: First day of the two day Fed meeting. The first day of a meeting is typically a non event as the market is awaiting the announcement when the meeting is over on Wednesday.
• Tuesday: Treasury Auction # 1 for the week, $40 BILLION in 2 year notes. The shorter term "stuff" has been well bid for most of this year, so it is not likely to have any effect in our world.
• Wednesday, June 24: May Durable Goods Orders expected to be -0.7% x transportation -0.4%. it is not likely that these will have any effect today.
• Wednesday: May New home sales expected UP 2.2%. Builders have been giving the store away in the form of sales concessions, that along with low rates is anticipated to a positive number. Even with this being a good news number, it will not likely be bad news for interest rates.
• Wednesday: Treasury Auction #2, this time $37 BILLION in 5 year notes. flirting just below 3% the 5 yr is anticipated to draw solid bids. Solid bidding will likely lead to steady and possibly lower rates. The reverse here is true too, if we see poor bidding drive the yield up on a 5 year it may be bad news for mortgage rates, fortunately that doesn't seem likely
• Wednesday(is a busy day): Fed meeting is Done at about 2:15pm. No one thinks the Fed will move rates, they cant move them down and they wont bump them up yet! I have always said that the Fed's words are entirely more powerful than their actions... So the post meeting statement is the key here. They will probably be upbeat siting some improving numbers in the past week or so, and will down play unemployment. The potential kicker here is their plans to purchase mortgages. I believe they will continue as planned, if they say they will buy more, this will be great news for mortgage rates, but it is more likely that the Fed Meeting will be a non event in the credit markets.
• Thursday June 25: Initial jobless claims expected down 8000. The labor market is a lagging indicator and is likely to get worse even as the economy improves so this number is not likely to be looked at.
• Thursday: The last Revision of first quarter GDP expected -5.7%. this is the first back to back drop in the quarterly numbers in over 50 years. 5.7% loss has been priced in, so it is not likely to move things unless this final revision is way off base.
• Thursday June 25: the last of the Auctions for the week, $27 BILLION in 7 year notes. I can almost cut and paste my notes for the 5 year here, but there is probably more room for the 7 yr auction to move rates than the 5. The strength or lack of strength in the bidding here potentially can swing rates either way.
• Friday June 26: may Personal Income, Spending and PCE, Expected +0.3%, +0.3% and +0.1%. the consumption is the key here (PCE) if it falls lower than forecast this will be great news for Mortgage Rates.

This has the potential to be a lumpy week since most of the potential movers are "unknowns" until they happen. The biggie is likely to be the Auctions, but the Potential biggie is the Fed statement, which is most likely to improve things if they say "we are going to buy more than we said"

I expect we will see a roller coaster with a few upset stomaches at the end of the week as we pull back into the station at the exact place that we left from.

Have a great week!!! 

Rob

Robert Rauf

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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