Mortgage Market Newsletter May 7th, 2012 Dana Bain Premiere Mortgage Services Inc. 978-422-2311

By
Mortgage and Lending with Premiere Mortgage Services Inc. MLO 18693

http://www.bainmortgage.com/MortgageMarketWeekInReview

Newsletter-May 7th, 2012
Provided by
Dana Bain & Robin Dunbar Bain

Dana Bain
Premiere Mortgage Services

www.BainMortgage.com

11 Malvern Hill Road
Sterling, MA 01564
Phone: (978) 422-2311
Fax: (978) 422-2313
E-Mail: dana@bainmortgage.com

 
 
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Market Comment

Mortgage bond prices finished the week slightly higher helping rates improve.The market was relatively stable after many weeks of volatile trading.We started the week on a positive tone as the PCE core index came in as expected.Trading was calm following the indication that inflation was in check.ISM Index data came in higher than expected which initially pressured rates but only slightly.The ADP employment figure was weaker than expected while the weekly jobs release was stronger than expected.The heavyweight employment report did little to settle the disparity as it was mixed.Mortgage interest rates finished the week better by about 1/4 of a discount point.

LOOKING AHEAD

Economic
Indicator

Release
Date & Time

Consensus
Estimate


Analysis

Consumer Credit

Monday, May 7,
3:00 pm, et

$8.8b Low importance.A significantly large increase may lead to lower mortgage interest rates.
3Y Treasury Note Auction

Tuesday, May 8,
1:15 pm, et

None Important.Notes will be auctioned.Strong demand may lead to lower mortgage rates.
10Y Treasury Note Auction

Wednesday, May 9,
1:15 pm, et

None Important. Notes will be auctioned.Strong demand may lead to lower mortgage rates.
Weekly Jobless Claims

Thursday, May 10,
8:30 am, et

370k Important.An indication of employment.Higher claims may result in lower rates.
Trade Data

Thursday, May 10,
8:30 am, et

$45.5b deficit Important.Affects the value of the dollar.A falling deficit may strengthen the dollar and lead to lower rates.
30Y Treasury Bond Auction

Thursday, May 10,
1:15 pm, et

None Important.Bonds will be auctioned.Strong demand may lead to lower mortgage rates.
Producer Price Index

Friday, May 11,
8:30 am, et

Up 0.1%,
Core up 0.1%
Important.An indication of inflationary pressures at the producer level.Lower figures may lead to lower rates.
U of Michigan Consumer Sentiment

Friday, May 11,
10:00 am, et

76 Important.An indication of consumers’ willingness to spend.Weakness may lead to lower mortgage rates.

Oil

Inflation fears tied to rising energy prices remain on the minds of traders.Inflation, real or perceived, erodes the value of fixed income investments such as mortgage-backed securities, causing prices to fall and rates to rise.Tensions with Iran over sanctions tied to their nuclear activities increase concerns that they will reduce their oil supplies to the world.Last week OPEC Secretary General Abdullah el-Badri indicated, “We’re working hard to bring down the price.We’re not comfortable.”OPEC indicates they are comfortable with oil around $100 per barrel.U.S. consumers are comfortable with price targets considerably lower than that.Unfortunately that doesn’t look to be a possibility at this time.OPEC blames rising prices on excessive speculation and noted they have been able to meet consumer needs.

Oil prices have fallen in the short term following signs of slowing US economic growth, reports that US inventory supplies are at record highs, and weakness in China’s demand. Falling energy prices are generally good for mortgage interest rates.The great news is that mortgage interest rates remain very favorable.Now is a good time to take advantage of these low rates to avoid any uncertainty with the future.The current rates are a sure thing while waiting for the possibility for lower rates is risky.



 

 
 
 
MORTGAGE MARKET IN REVIEW Newsletter-May 7th, 2012

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