|
Market Comment
Mortgage bond prices were sharply lower last week pushing mortgage rates higher. The financial markets remain extremely volatile, a trend that is expected to continue. Investors feared the Fed Reserve (Fed) would reduce the stimulus spending that has enabled stocks to hit record highs and mortgage interest rates to test historic lows. The jobs data released last week was better than expected fueling the fear the Fed will start tapering asset purchases in the next couple of months. For the week, interest rates rose by about 3/8’s in rate.
The minutes from the last Fed meeting will be released Wednesday and will be closely watched.
LOOKING AHEAD
|
Economic
Indicator
|
Release
Date & Time
|
Consensus
Estimate
|
Analysis
|
| 3-year Treasury Note Auction |
Tuesday, July 9,
1:15 pm, et
|
None |
Important. Notes will be auctioned. Strong demand may lead to lower mortgage rates. |
| 10-year Treasury Note Auction |
Wednesday, July 10,
1:15 pm, et
|
None |
Important. Notes will be auctioned. Strong demand may lead to lower mortgage rates. |
| Fed Minutes |
Wednesday, July 10,
2:00 pm, et
|
None |
Important. Details of the last Fed meeting will be thoroughly analyzed. |
| Weekly Jobless Claims |
Thursday, July 11,
8:30 am, et
|
339k |
Important. An indication of employment. Higher claims may result in lower rates. |
| 30-year Treasury Bond Auction |
Thursday, July 11,
1:15 pm, et
|
None |
Important. Bonds will be auctioned. Strong demand may lead to lower mortgage rates. |
| Producer Price Index |
Friday, July 12,
8:30 am, et
|
Up 0.2%,
Core up 0.1% |
Important. An indication of inflationary pressures at the producer level. Lower figures may lead to lower rates. |
| Consumer Sentiment |
Friday, July 12,
10:00 am, et
|
79 |
Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates. |
Consumer Sentiment
In the US the consumer is often seen as the driving force of the economy. A large percentage of the total economic output is for personal use. Analysts attempt to predict the future spending patterns of consumers to gauge economic activity.
The Michigan consumer sentiment index is one piece of data used to measure consumer attitudes. The index is derived from a telephone survey, which gathers information on consumer expectations of the overall economy. The preliminary report is released around the 10th of each month and then is revised throughout the remainder of the month. It is significant in that it provides a precursor into consumers’ willingness to spend in the months ahead. However, many analysts point out that willingness to spend does not always convert to actual expenditures.
Despite economic uncertainty, liquidity issues, housing market fluctuations, and high energy costs, American consumers continue to spend. However, many analysts question whether consumers can continue to buoy the economy. Look for any variation from estimates to cause mortgage interest rate volatility. Signs of eroding consumer confidence could lead to improvements in mortgage interest rates. However, stronger than expected figures could spike rates higher.
Remember that mortgage interest rates remain historically favorable and are subject to change on a daily basis.
Dana Bain
Premiere Mortgage Services
www.BainMortgage.com
11 Malvern Hill Road
Sterling, MA 01564
Phone: (978) 422-2311
Fax: (978) 422-2313
E-Mail: dana@bainmortgage.com
|
Comments(0)