There is weaker start in the rate markets this morning. In Asia stocks rallied on better employment reports, in Europe retail sales were better than expected. At 9:30 the DJIA opened +5. There is no relevant economic data scheduled for release today. This makes it likely that any changes to mortgage pricing will come from swings in stock prices. If the stock markets move higher from current levels, we may see bonds worsen and mortgage rates revise higher later today. If the major stock indexes move lower, mortgage rates may follow suit.
Last Week:
Last week rates were moved around by economic data. The stock market rallied, defying those that continue to expect a big decline. January personal income was less than expected, while personal spending was strong at +0.5%. February auto sales were expected to have increased, and they did; the only company that reported a decline was Toyota. The February employment report last Friday capped a good week for the various economic reports with the unemployment rate holding steady at 9.7%. On the housing front; January pending home sales jumped 12.3% from December. By Friday rates had improved slightly, but then the better-than-expected employment number pushed rates slightly higher
This Week:
This week won’t have as much to chew on and expect stocks to factor into trading the early portion of the week with very little data on tap. The Treasury auctions will be the focus throughout the middle portion of the week. Strong foreign demand would likely help mortgage bonds also. The jobless figures and retail sales data will be the focus for the end of the week.
Economic Indicator
3-year Treasury Note Auction
Tuesday, March 9,1:15 pm, et
None
Important. $40 billion of notes will be auctioned. Strong demand may lead to lower mortgage rates.
10-year Treasury Note Auction
Wednesday, March 10,1:15 pm, et
None
Important. $21 billion of notes will be auctioned. Strong demand may lead to lower mortgage rates.
Weekly Jobless Claims
Thursday, March 11,8:30 am, et
450k
Moderately important. An indication of the employment situation. A large increase may bring lower rates.
Trade Data
Thursday, March 11,8:30 am, et
$40.3 billion deficit
Important. Affects the value of the dollar. A falling deficit may strengthen the dollar and lead to lower rates.
30-year Treasury Bond Auction
Thursday, March 11,1:15 pm, et
None
Important. $13 billion of bonds will be auctioned. Strong demand may lead to lower mortgage rates.
Retail Sales
Friday, March, 12,8:30 am, et
Up 0.1%
Important. A measure of consumer demand. Weakness may lead to lower mortgage rates.
U of Michigan Consumer Sentiment
Friday, March, 12,10:00 am, et
73.6
Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates.
Market Forecast:
Overall, it will likely be another fairly active week in the mortgage market. Friday will probably be the most important day of the week with the Retail Sales report due, while the calmest day could be today or tomorrow, depending on the stock markets. I am expecting to see the most movement in rates the latter part of the week.
There is a real threat that continued global economic turmoil might keep foreign investors from purchasing mortgage bonds in the future. The Treasury auctions this week will be important in determining the current appetite of foreign investors for dollar denominated securities. If this week’s auctions are poorly bid mortgage bond prices could fall pressuring mortgage interest rates higher.
3-year Treasury Note Auction
Tuesday, March 9,1:15 pm, et
None
Important. $40 billion of notes will be auctioned. Strong demand may lead to lower mortgage rates.
10-year Treasury Note Auction
Wednesday, March 10,1:15 pm, et
None
Important. $21 billion of notes will be auctioned. Strong demand may lead to lower mortgage rates.
Weekly Jobless Claims
Thursday, March 11,8:30 am, et
450k
Moderately important. An indication of the employment situation. A large increase may bring lower rates.
Trade Data
Thursday, March 11,8:30 am, et
$40.3 billion deficit
Important. Affects the value of the dollar. A falling deficit may strengthen the dollar and lead to lower rates.
30-year Treasury Bond Auction
Thursday, March 11,1:15 pm, et
None
Important. $13 billion of bonds will be auctioned. Strong demand may lead to lower mortgage rates.
Retail Sales
Friday, March, 12,8:30 am, et
Up 0.1%
Important. A measure of consumer demand. Weakness may lead to lower mortgage rates.
U of Michigan Consumer Sentiment
Friday, March, 12,10:00 am, et
73.6
Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates.
Market Forecast:
Overall, it will likely be another fairly active week in the mortgage market. Friday will probably be the most important day of the week with the Retail Sales report due, while the calmest day could be today or tomorrow, depending on the stock markets. I am expecting to see the most movement in rates the latter part of the week.
There is a real threat that continued global economic turmoil might keep foreign investors from purchasing mortgage bonds in the future. The Treasury auctions this week will be important in determining the current appetite of foreign investors for dollar denominated securities. If this week’s auctions are poorly bid mortgage bond prices could fall pressuring mortgage interest rates higher.
Some Humor:
One afternoon a long time Senator was riding in his limousine when he saw two men along the roadside eating grass. Disturbed, he ordered his driver to stop and he got out to investigate.
One afternoon a long time Senator was riding in his limousine when he saw two men along the roadside eating grass. Disturbed, he ordered his driver to stop and he got out to investigate.
He asked one man, "Why are you eating grass?"
"We don't have any money for food," the poor man replied. "We have to eat grass."
"Well, then, you can come with me to my house and I'll feed you," the Senator said.
"But sir, I have a wife and two children with me. They are over there, under that tree."
"Bring them along," the Senator replied.
Turning to the other poor man he stated, "You come with us, also."
The second man, in a pitiful voice, then said, "But sir, I also have a wife and SIX children with me!"
"Bring them all, as well," the Senator answered.
They all entered the car, which was no easy task, even for a car as large as the limousine was. Once underway, one of the poor fellows turned to the Senator and said, "Sir, you are too kind. Thank you for taking all of us with you."
The Senator replied, "Glad to do it. You'll really love my place. The grass is almost a foot high."
The material contained in this newsletter is provided by a compilation of third parties to real estate, financial services and other professionals for their use and the use of their clients. The material provided is for informational and educational purposes only and should not be construed as investment and/or mortgage advice. Although the material is deemed to be accurate and reliable, we do not make any representations as to its accuracy or completeness and as a result, there is no guarantee it is not without errors.
The material contained in this newsletter is provided by a compilation of third parties to real estate, financial services and other professionals for their use and the use of their clients. The material provided is for informational and educational purposes only and should not be construed as investment and/or mortgage advice. Although the material is deemed to be accurate and reliable, we do not make any representations as to its accuracy or completeness and as a result, there is no guarantee it is not without errors.
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