I just realized I never uploaded this week’s Mortgage Market Weekly, so here it is, with one addition if you are interested. For those looking for a quick summary, here it is…brief up, followed by the next leg down just like we have been seeing. In simpler terms, no change expected. Check out the bottom for a quick viewpoint and a link to a video worth watching.
WEEK IN REVIEW
In case you don't remember what I said last week, I summarized it as another week where we would see mortgage backed securities rise some, then resume their downtrend. Well, that is exactly what happened.
There was very little in regards to economic data and that leaves news and technical indications in the driver's seat. The only other factor driving the markets were the three main Treasury auctions, which actually did not drive the markets as much as you might have suspected. Starting the week off was Jeffrey Lacker's comments stating the Fed's policy is risky and should be reviewed and MBS prices rose. Then comes the Obama Administration favoring the extension of the Bush-era tax cuts for two years, followed by a disappointing 3-year T-Note auction. That caused MBS prices to reverse course and the next leg lower began.
As the week played out, we saw the 10-year T-Note auction come in mediocre. Jobless Claims then came in slightly better than expected followed by a decent 30-year T-Bond auction. This allowed MBS prices to halt their plunge, though only briefly before "reality" caused even the 30-year T-Bond auction's benefits to fade. Then Friday brought a better than expected Consumer Sentiment to send MBS prices into what appears to be their next leg lower.
FORECAST FOR THE WEEK
Unlike last week, there will be quite a bit of economic data coming out highlighting inflation, the economy, the housing market, and even the Fed's next Policy Statement. Take a look at what is in store for us this week:
- Monday: 3-month and 6-month T-Bill auctions
- Tuesday: Producer Price Index (PPI), Retail Sales, FOMC Meeting Announcement
- Wednesday: MBA Purchase Applications, Consumer Price Index (CPI), Empire State Manufacturing Survey, Industrial Production, Housing Market Index, Crude Inventories
- Thursday: Jobless Claims, Housing Starts, Building Permits, Philadelphia Fed Survey
- Friday: Leading Indicators
As I have been doing recently, I reserve the technical analysis for my subscribers and those who listen in to my Mortgage Market Weekly radio show on Blog Talk Radio. This week I also added it to my Mortgage Market Weekly email newsletter, which you can sign up for at Mortgage Rate Forecaster.
ADDITIONAL MESSAGE
OK, I normally do not add videos that are essentially sales videos into my posts, but this one I think is a must see. If you know me and have been following me for sometime, you know much of what is included in this 90-minute video, but you will also likely learn something from it as well. I will warn you that it is a sales video from Mike Dillard on his new service called The Elevation Group, but Mike highlights some warning signs in today’s economy, Fed actions, Political reality, and more that resemble actions of the past that have caused serious problems for the future. Again, you have heard some of it from me, especially if you know me on a personal level, but Mike goes into more detail and summarizes it in 90-minutes or less. To that extent, this is a MUST SEE VIDEO in my opinion.
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