Last week marked the 9th week in a row of improving rates, but in reality it was a pretty flat week with Fannies only gaining 3/32nds for the week. Thursday was the scary day where we finally had a rally in stocks and the 30yr auction was not well bid making for a seriously negative day for rates that wiped out the gains for the week. That being said, Mid 4's for a 30 yr fixed with NO POINTS for our average buyer, Not to shabby!
This week's calendar has its share of movers to keep an eye on:
- Monday, June 13: A no news day today and Mortgages went from slightly negative this morning ot slightly positive this afternoon, most likely following the stock markets moves.
- Tuesday, June 14: May Producer Price Index expected 0.0% with the core +0.2%. As reported this one should be supportive of steady rates.
- Tuesday: May Retail Sales expected -0.4% Ex Auto +0.2%. From this estimate I would gather that no one is buying cars??? This one is probably going to lead to a sideways move in the markets, nothing scary here unless there is a big positive surprise in the report.
- Tuesday: April Business Inventories expected +0.9%. Snoozer of the week award, and not a market mover.
- WednesdayApril 15: May Consumer Price Index expected +0.1% with a core of +0.2%. The core is the key here, that 0.2% is the number that is most likely to yield a stable interest rate environment.
- Wednesday: May Industrial Production expected +0.2% with capacity at 77.0%. With capacity that low this report is not likely to spark any inflation fears so it is not a likely market mover
- Thursday, June 16: Initial Jobless Claims expected down 7,000. This puts the weekly number at 420,000 which is supportive of steady rates.
- Thursday: May Building Permits expected down 0.5% and Housing Starts +3.2%. While the starts number looks strong in reality it is just up from very low levels... all around this is a weak report and is not is not likely to move rates.
- FridayJune 17: may Leading Indicators expected +0.3%. LEI is one of the FED favorites, and this good news report is guessing we will see improvement by the end of they year. This is likely to cause some upward pressure on rates if the guesstimate is accurate.
The best bet is that the calendar above is already priced into the market, leaving us with Stocks as the big potential mover of rates for the week. Last week we saw the DOW fall below 12k -- the question is: Will it rally back above 12? If it does it is likely to push rates up a bit as it does. There are some analysts predicting the Dow dropping in the 11,800 range this week, which is actually supportive of steady rates for the week.
We are also very close to the end of the FED's $600 Billion stimulus package that runs out in a few weeks. I think this is more likely to become a non event since it is not likely we will see any new stimulus package come out of DC.
The data says steady rates for the week, but my gut says Bounce... after 9 weeks of improving rates the ball will bounce eventually, so don't be surprised when it does
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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