http://www.bainmortgage.com/MortgageMarketWeekInReview
| Newsletter-March 12th, 2012 |
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Provided by
Dana Bain & Robin Dunbar Bain
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Market Comment
Mortgage bond prices finished the weak near unchanged keeping mortgage interest rates relatively in check.Rates were positive the beginning of the week following reports that Greece would not make the deadline to persuade bondholders to restructure the debt they held.That all reversed by the end of the week when a large majority of bondholders looked to be on board.Greece was required to restructure the debt in order to obtain bailout funds from the European Union and the International Monetary Fund.Despite progress, there was still some uncertainty heading into the weekend.Most analysts agree that Greece still has challenges even if they obtain the bailout funds.Future instability in Greece could benefit our interest rates by reigniting the flight to quality buying that has factored into our low rates.
LOOKING AHEAD
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Economic
Indicator
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Release
Date & Time
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Consensus
Estimate
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Analysis
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| Retail Sales |
Tuesday, March 13,
8:30 am, et
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Up 0.3%
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Important.A measure of consumer demand.A smaller than expected increase may lead to lower mortgage rates. |
| Fed Meeting Adjourns |
Tuesday, March 13,
2:15 pm, et
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No rate changes
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Important.Few expect the Fed to change rates, but some volatility may surround the adjournment of this meeting. |
| Weekly Jobless Claims |
Thursday, March 15,
8:30 am, et
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355k
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Important.An indication of employment.Higher claims may result in lower rates. |
| Producer Price Index |
Thursday, March 15,
8:30 am, et
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Up 0.2%,
Core up 0.2%
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Important.An indication of inflationary pressures at the producer level.Weaker figures may lead to lower rates. |
| Philadelphia Fed Survey |
Thursday, March 15,
10:00 am, et
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8.8
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Moderately important.A survey of business conditions in the Northeast.Weakness may lead to lower rates. |
| Consumer Price Index |
Friday, March 16,
8:30 am, et
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Up 0.2%,
Core up 0.2%
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Important.A measure of inflation at the consumer level.Weaker figures may lead to lower rates. |
| Industrial Production |
Friday, March 16,
9:15 am, et
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Up 0.1%
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Important.A measure of manufacturing sector strength.A lower than expected increase may lead to lower rates. |
| Capacity Utilization |
Friday, March 16,
9:15 am, et
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78% |
Important.A figure above 85% is viewed as inflationary.Weaker figure may lead to lower rates. |
| U of Michigan Consumer Sentiment |
Friday, March 16,
10:00 am, et
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70.3
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Important.An indication of consumers’ willingness to spend.Weakness may lead to lower mortgage rates. |
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Producer Price Index
The producer price index is a measure of prices at the producer level and is important because it is the first inflation report to be released each month.Investors are typically able to gain an initial indication of inflationary pressures from the release.If producer prices are increasing, there is a tendency for producers to pass the increases on to consumers in the form of higher priced goods.It is important to note that the PPI is only a measure of goods, while the consumer price index is a measure of goods and services.It is possible for the price of goods to remain stable, while the price of services increases.In this scenario PPI would do little to warn of a change in inflationary pressures, while the CPI report would provide an indication of the inflationary effects of the service component.This distinction between the two reports shows why most analysts view the CPI as a more accurate indicator of inflation.Nevertheless, market participants still gain valuable insight into potential volatility in the financial markets from the PPI release.Be cautious heading into the inflation data this week.
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MORTGAGE MARKET IN REVIEW |
Newsletter-March 12th, 2012 |
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