Weekly Market Update
MARKET COMMENT
Mortgage bond prices rose last week applying downward pressure to mortgage interest rates. The Greek economic turmoil spread throughout the globe with equities falling precipitously. As a result we saw a tremendous amount of flight to quality buying of US debt instruments. The majority of the data came in bond-friendly with higher than expected weekly jobless claims helping rates improve.
Rates fell by about 3/4 of a discount point for the week.
The Treasury auctions, gross domestic product data, and the PCE core inflation reading will be the most important events this week. Look for continued choppy trading amid global economic instability.
LOOKING AHEAD
| Economic Indicator |
Release Date and Time |
Consensus Estimate |
Analysis |
| Consumer Confidence | Tuesday, May 25, 10:00 am, et |
58.5 | Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates. |
| 2-year Treasury Note Auction | Tuesday, May 25, 1:15 pm, et |
None | Important. $42 billion of notes will be auctioned. Strong demand may lead to lower mortgage rates. |
| Durable Goods Orders | Wednesday, May 26, 8:30 am, et |
Up 0.9% | Important. An indication of the demand for “big ticket” items. Weakness may lead to lower rates. |
| New Home Sales | Wednesday, May 26, 10:00 am, et |
Up 2.2% | Important. An indication of economic strength and credit demand. Weakness may lead to lower rates. |
| 5-year Treasury Note Auction | Wednesday, May 26, 1:15 pm, et |
None | Important. $40 billion of notes will be auctioned. Strong demand may lead to lower mortgage rates. |
| Q1 GDP | Thursday, May 27, 8:30 am, et |
3.3% | Important. The aggregate measure of US economic production. Weakness may lead to lower rates. |
| 7-year Treasury Note Auction | Thursday, May 27, 1:15 pm, et |
None | Important. $31 billion of notes will be auctioned. Strong demand may lead to lower mortgage rates. |
| Personal Income and Outlays | Friday, May 28, 8:30 am, et |
Up 0.4%, Up 0.2% |
Important. A measure of consumers’ ability to spend. Weakness may lead to lower mortgage rates. |
| PCE Core | Friday, May 28, 8:30 am, et |
Up 0.1% | Important. An indication of inflation. Weakness may lead to lower rates. |
| U of Michigan Consumer Sentiment | Friday, May 28, 10:00 am, et |
73.2 | Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates. |
NEW HOME SALES
New Home Sales data is compiled monthly by the Department of Commerce’s Census Bureau and is gathered from builders throughout the country. The data represents new home sales for the nation as well as four areas of the country: the Northeast, the Midwest, the South, and the West. Information on the average price of a home, the number of homes for sale, and the supply of unsold homes are also provided. The data is an important indicator because it shows any strength or weakness in the housing sector. A slowdown in new home sales tends to lead to a slowdown in housing starts, which will continue to affect other indicators. New Home Sales data is often volatile and difficult to predict. The data remains significant and can move mortgage interest rates.