|
Market Comment
Mortgage bond prices fell last week, which pushed mortgage interest rates higher.Rates were positive the beginning of the week following reports that European leaders must do more to stabilize their economies.Concerns emerged that the UK has “run out of money” according to Chancellor George Osborne.Higher than expected Q4 gross domestic product data, lower than expected weekly jobless claims, and strong stocks pressured rates considerably higher Wednesday afternoon and Thursday morning.Weaker than expected personal income and outlays data helped stem some of the losses but not enough.Unfortunately, mortgage bonds ended the week worse by 1/4 to 3/8 of a discount point.
LOOKING AHEAD
|
Economic
Indicator
|
Release
Date & Time
|
Consensus
Estimate
|
Analysis
|
| Factory Orders |
Monday, March 5,
10:00 am, et
|
Up 0.7% |
Important.A measure of manufacturing sector strength.Weakness may lead to lower rates. |
| ADP Employment |
Wednesday, March 7,
8:30 am, et
|
145k |
Important.An indication of employment.Weakness may bring lower rates. |
| Preliminary Q4 Productivity |
Wednesday, March 7,
8:30 am, et
|
Up 0.3% |
Important.A measure of output per hour.Improvement may lead to lower mortgage rates. |
| Consumer Credit |
Wednesday, March 7,
3:00 pm, et
|
$9.5b |
Low importance.A significantly large increase may lead to lower mortgage interest rates. |
| Weekly Jobless Claims |
Thursday, March 8,
8:30 am, et
|
349k |
Important.An indication of employment.Higher claims may result in lower rates. |
| Employment |
Friday, March 9,
8:30 am, et
|
8.2%,
Payrolls +190k
|
Very important.An increase in unemployment or weakness in payrolls may bring lower rates. |
| Trade Data |
Thursday, March 9,
8:30 am, et
|
$46b deficit |
Important.Affects the value of the dollar.A falling deficit may strengthen the dollar and lead to lower rates. |
Gas Prices
The fear of continued energy price increases is ever present with gasoline prices pushing towards the $4/gallon mark and oil prices in the $100/barrel range.Some areas of the US have seen gas prices rise to levels not seen since 2008.This comes amid a difficult time for many people as good jobs remain scarce, the housing market struggles, and the economy remains fragile.
Oil prices remain high despite weaker demand across the globe.Most analysts point to tensions in the Middle East for the price increases.Iran recently cut supplies to many countries.Many foreign nations blame the rising prices on a weaker US dollar.Higher energy costs are generally viewed as evidence of inflation.Inflation erodes the value of fixed income investments such as mortgage bonds causing prices to fall and rates to rise.
OPEC increased output to 2008 levels but prices continue to rise.The world economies are still struggling and a spike in energy prices could lead to severe economic turmoil.However, predictions are tenuous at best, the future is uncertain, and market sentiment changes daily.
The important thing to remember is that mortgage interest rates remain historically favorable.Now is a great time to avoid the uncertainty surrounding continued market volatility and the possibility of higher mortgage interest rates.
|
Comments(0)