Last week was the 8th week in a row of improving Mortgage Rates with fannies gaining another 9/32nds for the week we now have Mid 4's available for many buyers. We are now within spitting distance of the all time lows we saw last fall. The bad news here is that the employment report was much weaker than anticipated and that report was a big part of last weeks gain.
This weeks calendar is mostly overshadowed by 3 Auctions pumping a few extra billion worth of bonds into the market. Here is the Calendar:
- Monday, June 6: A no news day today with Fannies trading in mostly negative territory erasing most of the gains we saw last week. Even stocks are down a bit today which makes me wonder if the markets themselves are pretty confused?
- Tuesday, June 7: Treasury auction number 1 with $32 Billion in 3 year notes. Most of the shorter term auctions have been well bid, so I anticipate more of the same here. If well bid this one should support steady rates.
- Wednesday, June 8: Auction number 2 with $21 Billion in 10 year notes. with the yield on 10yrs flirting under 3% it may be difficult to get investors to bid. This one could be bad news for rates and it is highly unlikely it will be supportive of lower rates.
- Wednesday: Beige Book Time. This is a book the Fed puts together that compiles the reports from all 12 districts. It is unlikely there will be any surprises here
- Thursday June 9: Initial Jobless claims for last week expected down 7,000. This keeps the weekly number well above the 400k mark which continues to be BAD news... Thus supportive of steady interest rates.
- Thursday: April Wholesale Inventories expected +1.0%. Stale data is typically not a market mover.
- Thursday: last Auction of the week with $13 Billion in 30 year bonds. With yields flirting around 4.25% it is difficult to say if this will be well bid. It is pretty unlikely the bidding will drive the yield any lower, so the best bet here is that this auction will be supportive of steady rates, and it will be very unlikely that we will see lower rates as a result.
- Thursday: By the close we see MBS roll over to a July delivery. This typically causes a small bump up on rate sheets when that delivery date is pushed forward.
- Friday June 10: A no news day.
The biggie of the week certainly will be all 3 auctions. Excess supply is always an issue, and even more so as yields drop to levels that may not be all that attractive to investors. There is enough uncertainty in the economy that should be supportive of "OK" bids which should equate to a market neutral event, but this uncertainty can also make traders cautious in their bidding as well... keep a close eye on the Auctions this week - one poorly bid auction is likely to cause a quick tick up in rates, and after 8 weeks of improving rates, would anyone be surprised if we do see rates climb back up? I wouldn't!
Have a great week
Mortgage Loan Originator
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!
Real Estate Mortgage Network Inc.
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