Mortgage Rates and What May Move Them This Week: June 28, 2010
Last week was another good week for rates with Fannies gaining 13/32nds by the end of the week. There was a bit of mixed news but overall numbers came in a bit weaker than anticipated, and the FED said that they anticipate keeping rates low "for an extended period". All together that is textbook good news for long term interest rates and we still SOLIDLY have rates available in the 4's on a 30 year fixed rate mortgage (for HIGHLY qualified buyers)
This week Has its mix of data to chew on and it is the beginningof a new month with some fresh stats that the market will be watching closely
Here is this weeks calendar:
- Monday, June 28: May Personal Income expected +0.5%, Spending +0.1% and PCEindex +0.1%. The numbers came in pretty much as expected withincome up 0.4%, spending up 0.2% the kicker was that savings is up 4% which means the consumer is holding onto cash rather than spending. All together that means some good news for rates today with the market trading slightly higher in price which means the yield is down slightly.
- Tuesday June 29: June Consumer Confidence expected down a bit to 63.0. Typically investors are more interested in what a consumer does, and do not care as much about how they feel. Especially this week with Friday's number being a biggie.
- Wednesday June 30th: A no news day
- Thursday, July 1: Initial Jobless claims anticipated down 7,000 to 450,000. Remember, above 400k is ugly, so it is recessionary and supportive of steady rates.
- Thursday: June Institute of Supply Mgtexpected 59.0%. This is slightly down from last month but not enough to scare the markets and is not a likely market mover.
- Thursday, at Dusk: Fireworks over the Metedeconk River in Brick, NJ. Summer is in full force!
- Friday, July 2: Employment report with non farm payroll down 110,000 Jobless rate of 9.8% and average hourly earnings +0.1%. The weak report is priced into the market and a report close to the educated guess is not likely to be a market mover. If there are less than 50k jobs lost and/or a 9.7% jobless rate this will be more good news than expected and we may have a sell off push rates up.
- Friday: May factory orders expected -0.5%. Especially in the wake of the mornings employment report, this is not likely to be looked at.
- Friday NOTE: Normally you would expect an early holiday close but since the market is closed on Monday for the 4th of July Holiday, there will not be an early close this Friday. The problem here is that I anticipate VERY light trading Friday since investors will likely be in Holiday Mode and light trading can cause bigger swings than expected.
- Monday July 5th: Federal holiday, No trading.
From my comments above, can you predict the "biggie of the week"???? Hands down it is Friday's employment report. For most of this week we may see a steady to improving Mortgage Market if stocks continue to sink, but from Wednesday on it could be bumpy in anticipation of the employment report and I anticipate that trading will get thinner and thinner as we get closer to the holiday weekend as traders begin packing for their weekend get a ways with their families.
The employment report is always a potential biggie every month, it has the biggest potential to swing the market, probably more so than any other piece of market data, and the huge potential of light trading due to the 4th of July holiday will only amplify market reaction, especially if we are surprised by a stronger than expected employment report.
Hold on to your hats! That's this weeks two cents, Have a HAPPY 4th Of JULY !
Rob
Mortgage Banker
NMLS ID# 248937
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!
Real Estate Mortgage Network Inc.
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