|
Market
Comment
Mortgage bond prices remained nearly unchanged
last week holding interest rates steady. Rates rose following the
release of consumer price index data released Wednesday that showed
more inflation than economists estimated. However, the bond market
recovered the losses Thursday following weaker than expected LEI and
Philadelphia Fed survey data.
For the week, interest rates on government and
conventional loans remained unchanged.
The preliminary first quarter gross domestic
product data Thursday will be the most important event this week.
Durable goods orders, the Treasury auctions, income, outlays, and
consumer sentiment will also be important. The market will close
early Friday ahead of the Memorial Day Holiday the following Monday.
LOOKING
AHEAD
|
Economic
Indicator |
Release
Date &
Time |
Consensus
Estimate |
Analysis
|
| Durable
Goods Orders |
Wednesday, May
24,
8:30 am, et
|
Down
0.7% |
Important.
An indication of the demand for "big ticket" items.
Weakness may lead to lower rates.
|
| New
Home Sales |
Wednesday, May
24,
10:00 am, et
|
Down
5.1% |
Important.
An indication of economic strength and credit demand. A
decrease may lead to lower rates.
|
| 2-year
Treasury Note Auction |
Wednesday, May
24,
1:30 pm, et
|
None |
Important.
Notes will be auctioned. Strong demand may lead to lower
mortgage rates.
|
| Q1
Preliminary GDP |
Thursday, May
25,
8:30 am, et
|
Up
5.8% |
Very
important. The aggregate measure of US economic production.
Weakness may lead to lower rates.
|
| Existing
Home Sales |
Thursday, May
25,
10:00 am, et
|
Down
2.0% |
Low
importance. An indication of mortgage credit demand. A
significant decrease may lead to lower rates.
|
| 5-year
Treasury Note Auction |
Thursday, May
25,
1:30 pm, et
|
None |
Important.
Notes will be auctioned. Strong demand may lead to lower
mortgage rates.
|
| Personal
Income and Outlays |
Friday, May 26,
8:30 am, et
|
Income up 0.8%,
Outlays up 0.7%
|
Important.
A measure of consumers’ ability to spend. Weakness may lead
to lower mortgage rates.
|
| U
of Michigan Consumer Sentiment |
Friday, May 26,
10:00 am, et
|
None |
Important.
An indication of consumers’ willingness to spend. Weakness
may lead to lower mortgage rates.
|
| Early
Market Close |
Friday, May 26,
2:00 pm, et
|
None |
Important.
Shortened trading session ahead of extended holiday weekend
may lead to market volatility.
|
Fundamental Week
Mortgage bonds traded in negative territory last
week as traders digested data showing signs of inflation. Fear and
emotion dominated trading. The abundance of fundamental data this
week opens the door for additional market volatility. If the data
this week reinforces the view that the economy is strengthening with
price pressures, mortgage bonds will continue to fall pushing
mortgage interest rates higher. However, if the data comes in weaker
than expected then a portion of the recent losses could be recouped.
Mortgage interest rates rose last week. Despite
the negative movements, rates remain historically low. Now is a
great time to avoid the uncertainty surrounding continued market
volatility by locking your loan. Capitalizing on current levels
protects against future volatility.
To
unsubscribe, please hit "reply" and include unsubscribe in
the subject line.
Copyright
2006. All Rights Reserved. Mortgage Market
Information Services, Inc. www.ratelink.com
The information contained herein is
believed to be accurate, however no representation or warranties are
written or implied.
|
