Mortgage Rates and What May Move Them This Week: September 27, 2010

Reblogger Catherine Chaudemanche - Edison & Central NJ
Real Estate Agent with Metuchen Keller Williams Elite Realty / Middlesex County, NJ

Please find below the weekly economic calendar from Robert Rauf-

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Original content by Robert Rauf NMLS 248937

 

 Last week was another positiveone for mortgages with Fannies gaining 11/32ndsby the close on Friday. An interesting trend I have seen over the past 6 weeks... We have had a significant sell off on the past 6 Fridays, with a bit of a rebound every following Monday.  It appears that there is profit taking at the end of each week going into the weekends and buying on Mondays when traders return for the week.

The big news last week was partially the home sale numbers that looked strong on the surface, but are still at historically low levels, and Fed Comments.  The FOMC meeting went off pretty much as expected but they did hint at buying Treasuries and said they are prepared for additional accommodations if necessary.

This week has its share of news that will bounce things around, here is the calendar:

  • MondaySeptember 27th: Auction # 1 of the week with36 Billion of 2 yr notes. This auction went off well with solid bidding. There was also a downgrade of some Irish and Portuguese debt today that has helped our credit markets improve a bit.
  • Tuesday September 28th: August Consumer Confidence expected at 52.5%. This is down from last month and as forecast will be supportive of steady rates. Typically the market is not as interested in what the consumer is thinking, but more about what they are actually doing.
  • Tuesday: Treasury auction #2 with $35 Billion in 5 year notes. Based on Monday's Auction and news it is likely that this on will be well bid and be supportive of steady rates.
  • WednesdaySeptember 29: Auction #3 with $29 Billion in 7 year notes. While this one is also anticipated to go off well and become a non event for the market, it does put a bit of a knot in my stomach. Anytime you have competing items in the market you do need to worry and the 7yr term is pretty darn close to the life expectancy of a typical Mortgage.  So just be cautious here.
  • Thursday, September 30: Initial Jobless claims expected down 5,000. This is still a weak Weekly number that is likely to be supportive of steady rates.
  • Thursday: Final estimate of second quarter GDP anticipated at +1.6%. As reported it is not a likely mover of markets since it matches the previous "guess". If we are shocked by a stronger than expected number we may lose some ground in the mortgage market.
  • FridayOctober 1: (OCTOBER ALREADY???) August Personal Income expected +0.3% Spending +0.3% and PCE +0.1%. As reported these are supportive of steady rates, but pay close attention to the Personal consumption Expenditure, it is a Fed Favorite and if we get shocked by a strong number here it is likely we will see a bump up in rates.
  • Friday: September Institute of Suppl management expected at 54.5. This is a decline from the previous month that is not likely to influence the trend in rates.
  • Next week:  Friday will likely be the biggie, with the employment report...

With the comments last week from the Fed, it is probably safe to bet on the Auctions being well bid this week, Toss in a little European turmoil into the mix (credit down grades) that will cause a bit of a flight to quality and it is a likely (but not guaranteed) recipe for steady interest rates.  Thursday and Friday are probably the days to watch for GDP and PCE, a shocker of a report on either of these will be bad for rates.

This is one of the few times that the employment report is not reported on the first Friday of the Month, so we have to wait an extra week for that one.  The Employment report is the one report that has the ability to move the markets the most, at least I have seen the markets move the most violently on stronger/weaker employment reports... so keep an eye on the radar for that one.

Overall I anticipate this will be a pretty flat week by time the bell rings on Friday. But my advice is still to lock in since it is the safest gamble.

That's This week's 2 cents worth! 

 

Have a great week!

Rob

Robert Rauf

Mortgage Banker

NMLS ID# 248937

www.RobertRaufHomeLoans.com   or my blog: http://activerain.com/blogs/rrauf

(732)223-1630 x102

RRauf@REMN.com

Since 1987 I have been helping my clients fulfill their dream of home ownership!

Real Estate Mortgage Network Inc.

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Rainmaker
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Robert Rauf
HomeBridge Financial Services (NJ) - Toms River, NJ

As always: Thank you for the compliment of the reblog!

Sep 29, 2010 05:29 AM #1
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Catherine Chaudemanche - Edison & Central NJ
Metuchen Keller Williams Elite Realty / Middlesex County, NJ - Edison, NJ
Full Time, Informed and Involved- Results Driven

Have a great week Rob-

Sep 29, 2010 10:28 AM #2
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