There are only two economic reports that are likely to affect mortgage rates. However there is one non-economic release that could dramatically affect the markets. All releases are scheduled for the same day, meaning on average we may see a relatively calm week for mortgage rates. The financial markets are closed today in observance of the President’s Day Holiday and will reopen Tuesday morning.
Wednesday morning brings us all of this week’s relevant news and data. The Labor Department will release January’s Consumer Price Index (CPI) at 8:30 AM ET, which measures inflationary pressures at the very important consumer level of the economy. With exception to maybe the Employment report, the CPI is the most important report that we see each month. Its results can have a huge impact on the financial markets, especially long-term securities such as mortgage-related bonds. It is expected to show a 0.1% increase in the overall index and a 0.2% rise in the more important core data. If we see weaker than expected readings, bond prices should rise and mortgage rates would likely fall.
The second and final relevant economic data of the week is the Leading Economic Indicators (LEI) for January. This Conference Board report attempts to predict economic activity over the next three to six months. It is expected to show a 0.2% rise, meaning that economic activity may rise in the near future. A smaller than expected increase would be good news for the bond market and mortgage rates.
The afternoon brings us the release of the minutes from the last FOMC meeting. Traders will be looking for any indication of the Fed’s next move regarding monetary policy. They will be released at 2:00 PM ET, therefore, any reaction will come during afternoon trading.
Overall, the most important day of the week is obviously Wednesday with the release of all of the week’s relevant news. The rest of the week will likely be fairly quiet, keeping mortgage near Wednesday’s afternoon levels. The recent bond rally has me concerned that traders may sell some holdings to capture the profits from the run in prices. We may see some selling ahead of Wednesday’s data while some traders may wait until after Wednesday’s news. I believe that favorable news is already built into current bond prices.
Craig Higdon has over 14 years experience in financing commercial loans, small business loans, construction loans, and land loans. He owns Excelsion Mortgage, a commercial mortgage brokerage offering real estate investors a wide range of resources to help them in their investment activities.
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Mortgage Loan Market Commentary
ONLY ONE DAY OF NEWS
There are only two economic reports that are likely to affect mortgage rates. However there is one non-economic release that could dramatically affect the markets. All releases are scheduled for the same day, meaning on average we may see a relatively calm week for mortgage rates. The financial markets are closed today in observance of the President’s Day Holiday and will reopen Tuesday morning.
Wednesday morning brings us all of this week’s relevant news and data. The Labor Department will release January’s Consumer Price Index (CPI) at 8:30 AM ET, which measures inflationary pressures at the very important consumer level of the economy. With exception to maybe the Employment report, the CPI is the most important report that we see each month. Its results can have a huge impact on the financial markets, especially long-term securities such as mortgage-related bonds. It is expected to show a 0.1% increase in the overall index and a 0.2% rise in the more important core data. If we see weaker than expected readings, bond prices should rise and mortgage rates would likely fall.
The second and final relevant economic data of the week is the Leading Economic Indicators (LEI) for January. This Conference Board report attempts to predict economic activity over the next three to six months. It is expected to show a 0.2% rise, meaning that economic activity may rise in the near future. A smaller than expected increase would be good news for the bond market and mortgage rates.
The afternoon brings us the release of the minutes from the last FOMC meeting. Traders will be looking for any indication of the Fed’s next move regarding monetary policy. They will be released at 2:00 PM ET, therefore, any reaction will come during afternoon trading.
Overall, the most important day of the week is obviously Wednesday with the release of all of the week’s relevant news. The rest of the week will likely be fairly quiet, keeping mortgage near Wednesday’s afternoon levels. The recent bond rally has me concerned that traders may sell some holdings to capture the profits from the run in prices. We may see some selling ahead of Wednesday’s data while some traders may wait until after Wednesday’s news. I believe that favorable news is already built into current bond prices.
Craig S. Higdon, “The Investment Property Insider”
www.ExcelsionMortgage.com, www.InvestmentPropertyInsider.com
Craig Higdon has over 14 years experience in financing commercial loans, small business loans, construction loans, and land loans. He owns Excelsion Mortgage, a commercial mortgage brokerage offering real estate investors a wide range of resources to help them in their investment activities.
This entry was posted on Monday, February 19th, 2007 and is filed under -Mortgage Loan Market Commentary. You can follow any responses to this entry through RSS 2.0. You can leave a response, or trackback from your own site.