Did I mention in last Monday's Blog that I thought we would have a bumpy week last week? I just did a quick Tally... I get updates on Fannies and Ginnies at least 3 times a day, I am scheduled to get the "open", "Mid day" and "Close" each day, if the market is bouncing a lot, I get multiple updates through out the day. So just how bumpy was it? Thursday I received about 45 updates, and Friday 29 updates. Yup it was a busy week and over all it ended up being a positive one for interest rates with a gain of 21/32nds for Fannies. Most of last week's gain came on Thursday when The mysterious 1,000 point plunge in stocks happened, and Friday the market just couldn't get its direction in the wake of Thursdays confusion along with mixed signals in the employment report.
This week promises to be a bumpy one as well. Yesterday the Finance Ministers from the EU met in Brussels..... That will be the top news for the beginning of the week.
- Monday May 10, 2010: A belated Happy Mother's day!
- Monday: In the absence of any data today the European Central Bank was kind enough to put forth a huge bail out package of over $1,000,000,000,000.00. Actually they call it an Emergency Rescue Package.... This was bad news for interest rates since it effectively stops the "flight to quality" money from flowing into our credit markets. As I type, we have lost half of last weeks gains on this news.
- Tuesday, May 11: Treasury auction; $38 Billion in 3 year notes. Excess Supply this week is not a good thing with Monday's news from the European Central bank. With the Trillion dollars to fix Europe's Woes in support of the Euro, it is highly unlikely we will see funds flowing into our credit markets. This will likely be noticeably BAD for US interest rates.
- Wednesday May 12: Treasury Auctions $24 Billion in 10 year notes. This type of news is more likely to move rates up than down, At best we will see this be supportive of steady rates.
- Thursday, May 13: Initial jobless claims anticipated down 4,000 to 440,000. Any number above 400k is supportive of steady rates.
- Thursday: 3rd auction of the week with $16 billion in 30 year bonds. Let's hope this is well bid, if not we are likely to see mortgage rates climb up today.
- Friday, May 14: April Retail Sales expected to be +0.2% ex Auto +0.5%. This is a pretty big gain that is expected to be mostly from rebates from Uncle Sam to buy Energy Efficient appliances, so investors are not likely to worry about the strength in this report if it comes in close to the estimate.
Last week was a bumpy one, and this week could produce more of the same. The rescue pan for Europe is a good news scenario that is bad news for interest rates. One thing we have going for us is the uncertainty in what caused the sell off on Thursday. Their may still be enough doubt in the strength of our stock market to keep some cash in our credit markets, this is only a possibility. There is much more room for rates to go up. Up is the most likely scenario, Steady rates is more of a possibility than a probability, and down is highly unlikely at this point. My advise this week is to LOCK NOW!
Have a great week!
Rob
Mortgage Banker
NMLS ID# 248937
www.RobertRaufHomeLoans.com or my blog: http://activerain.com/blogs/rrauf
(732)223-1630 x102
Since 1987 I have been helping my clients fulfill their dream of home ownership!
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