This weeks Mortgage Rate Movers

Lets re-cap last week before we dig into this week: Mostly because it was a great one for interest rates. Even with some mixed signals we squeaked out a 15/32nd gain on Fannies last week which translates into a nice improvement on a rate sheet. This came together even with better than expected home sales numbers and a 2 yr auction that had higher yields than anticipated. So Score one for the credit markets!

That's enough of the old, How about the new: Well this weeks numbers start a new month of data (hard to believe that tomorrow is September all ready!) With a new month brings a basket of new data.

Here is this weeks calendar:

• MondayAugust 31: No major news day, but in the absence of the news we have a pretty happy market and as we approach the close we have the market trading solidly up 10/32nds
• TuesdaySeptember 1: Institute of Supply Mgt/Manufacturing index expected 50.1. Already factored into the soup, it is considered to be a toothless report which is not likely to move the credit markets.
• Wednesday September 2: Revised Q2 productivity expected 6.1% vs last 6.4%. The first productivity estimate was a guess. This Revision is not likely to move rates.
• Wednesday: July Factory Orders expected +1.5%. Now that September is here, no one cares about July Numbers. Old news is not that important in a very forward looking market.
• Thursday, September 3: Happy Birthday Susan Mangigian, And Happy Birthday to me as well!
• Thursday: Initial Jobless claims expected down 20,000. Most analysts believe that it will take a long time for the jobs market to recover. This ugly estimate is not likely to be a mover, especially with Friday's number just 24 hours away.
• Thursday: Institute of Supply mgt/Service Sector expected 48.7. The slight improvement over last month is anticipated. Near the target it is not likely to hurt at all, but if it comes in above 50, expect rates to bump up with it.
• FridaySeptember 4: August jobs report with Non farm payroll -265,000, Jobless rate 9.5% and average earnings flat. This guestimate is typically pretty accurate, but when the analysts get it wrong that is when all hell breaks loose in the market.

There are 2 biggies of the week, one on the calendar, and one the calendar it self. First off the data piece: Fridays employment report is traditionally a market mover and should be watched closely, While Thursday's birthdays have absolutely no effect what so ever. If non farm payrolls are -235k or better with a 9.4% jobless rate, stocks will rally and interest rates will be hurt on the good news, but if the jobs report is weaker than forecast, just the opposite will hold true.

Now for the Calendar it self: This is traditionally one of the lightest trading weeks of the year. The last chance to squeakin a few extra summer vacation days. Thin Trading ahead of a long weekend is almost always problematic. Historically I have seen the trading be very conservative headed into the close on Friday. Foreign markets are open Monday while our markets are closed, that just adds to the concerns. So if the market goes bad, it is more likely to go bad fast since there will be less volume flowing to settle things down.

It is a tough call this week, I would be most cautious of Fridays report and pay close attention to the day to day trading and the good vs bad days in stocks.  The stock market has the potential to rob from the credit markets and that will be a driving force in rates as well.

Have a wonderful 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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