MARKET COMMENT
Mortgage bond prices rose last week pushing mortgage interest rates lower. Stronger than expected consumer price index data did little to help alleviate inflation fears. CPI rose 0.8%, higher than the expected 0.4% increase. The core, which excludes volatile food and energy prices, rose 0.3%, higher than the expected 0.2% increase. Fortunately strength in the US dollar and falling oil prices helped mortgage bonds rally. For the week, interest rates on government and conventional loans fell by about 1/4 of a discount point.
The producer price index Tuesday will be the most important event this week. Housing starts and leading economic indictors data will be carefully watched. Look for oil prices and the strength of the US dollar to continue to factor into trading.

JACK