For those looking for a prognostication of where Mortgage Rates are headed, you can add my Vote with those that say Rates
will go Down after the FED meeting this week.
With Japan struggling (and a stronger YEN), China's economy definitely slowing, European equity markets on the slide (for 4 straight weeks) - expectations are that these factors alone are enough to build a strong case for lower Mortgage Rates (expect the Yield on the 10 year trasury to plummet and the Fannie bond to get close to 103.00 again (we were below 100.00 this week).
US markets have already priced in an expected reduction in QE3 of between 25-35B; I don't believe that's realistic (maybe 15B); we'll see. In my opinion, this factor alone should bode well for lower Mortgage Rates towards the end of the week.
Bottomline, with no definitive strategy in Europe and the Asian sector weak, expect continued volatility as well as a trend toward lower Mortgage Rates.
Things to watch this week:
Monday, June 18
- Lots of housing data this week, beginning with the housing market index at 10:00 a.m. ET
- Manufacturing data report
- G8 summit in Northern Ireland
Tuesday, June 19
- The two-day FOMC meeting begins
- Housing data with housing starts - 8:30 a.m. ET
Wednesday, June 20
- FOMC meeting announcement - 2:00 p.m. ET, Bernanke comments - 2:30 p.m. ET
- Data: Weekly mortgage applications, oil inventories
Thursday, June 21
- Data for the real estate sector - existing home sales at 10:00 a.m. ET
- Important data to watch: Jobless claims, PMI manufacturing index, Philadelphia Fed survey, leading indicators, natural gas inventories, Fed balance sheet/money supply
We'll see what happens, but my guess : Lower Rates by 6/21.
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