Whats up (or Down) in Rates this week?

This is a pretty busy week of fairly important economic data, The week starts off slow But Wednesday - Friday there is quite a bit of data being released.

• Monday and Tuesday January 12 & 13th: No data
• Wednesday Jan 14: December Retail sales Expected -1.2% ex Auto -1.3%. Lets face the facts, consumers are cutting back on spending. The fear of losing a job causes most people to hold onto their $. This dismal number is priced in, it would take a wide swing either way to move rates noticeably.
• Wednesday: November business inventories; expected -0.5%. This is an old number, no one is really concerned with November info at this point.
• Thursday Jan 15: Weekly Jobless claims; anticipated +33,000. Another number that is pretty week that is already "priced in" and not likely to move the market unless there is a big surprise.
• Thursday January 15: December PPI; expected -2% with a core rate of +0.1%. The drop in energy prices have helped this number be so low, but it is the core number that removes the volatile food and energy components that is important here. Above the +.1% and we are in for a bad day and higher rates, the forecast number will support steady to possibly lower rates.
• Friday January 15: CPI, expected -0.9% with a core +0.1%. Every thing I mentioned above for PPI holds true for CPI as well.
• Friday January 15: Industrial Production & Capacity utilization; anticipate d-1.0% and 74.6. Another Ho-hum report. Last weeks supply Management report already showed a 28 year low, so there is no surprises here.
• Friday: Market should close at 2pm for the MLK holiday
• Monday: Mortgage markets are closed (as are most banks).

While these numbers have been known to move the market (especially PPI and CPI), it is not likely we will see any big move off of this weeks data.

Keep in mind that last week Freddie Mac reported Record low interest rates with the 30 year fixed rate mortgage falling to it's lowest level since they have been keeping records. It is likely that the moves this week will look at moves in stocks. If we get a run up in stocks we will see a sell off in mortgages which means higher yields. BUT, if there is a sell off in mortgages it is HIGHLY likely that the Fed will step in and continue buying Mortgages to help calm the markets down and keep rates low. If we see Stocks sell off, it is likely that mortgage rates will drop, and the Fed will just sit back and watch and allow that to happen. 

It is likely we will see a stock market rally in the coming week. When Obama won on 11/4/08 Wall street saw its biggest Election Day Rally ever, It is highly likely that inauguration day will be a day to rally as well.

I hope this is a useful tool for you, Have a GREAT WEEK!

Rob

Robert Rauf

(732)223-1630 x102

Real Estate Mortgage Network

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