Short Maybe Quit Week for Mortgage Rates.

Sep 7, 2010

This week brings is a quite week for the economic calendar, However; two Treasury auctions that may play a role in this week’s mortgage pricing.


Date Time (ET) Statistic For Market Expects Prior
09/08/10 10:30:00 AM Crude Inventories 09/04/10 NA 3.42M
09/08/10 02:00:00 PM Fed’s Beige Book Sep NA NA
09/08/10 03:00:00 PM Consumer Credit Jul -$5.25B -$1.3B
09/09/10 08:30:00 AM Initial Claims 09/04/10 470K 472K
09/09/10 08:30:00 AM Continuing Claims 08/28/10 4445K 4456K
09/09/10 08:30:00 AM Trade Balance Jul -$47.3B -$49.9B
09/10/10 10:00:00 AM Wholesale Inventories Jul 0.40% 0.10%


Wednesday afternoon. The Federal Reserve will release its Beige Book report at 2:00 PM ET Wednesday. This report details current economic conditions in the U.S. by Federal Reserve regions. It is believed to be a key source of data when the Fed meets for their FOMC meetings and is usually released approximately two weeks prior to each meeting. If it reveals any significant surprises, we may see movement in the markets and mortgage pricing as analysts adjust their theories on the Fed’s next move. Most likely thou gh, it will be a non-event and will not lead to a noticeable change in mortgage rates.
Also Wednesday is a 10-year Treasury Note auction, which will be followed by a 30-year Bond auction Thursday. It is fairly common to see some weakness in bonds before these sales as investors prepare for them. If the sales are met with a decent demand from investors, indicating interest in longer-term securities such as mortgage-related bonds still exists, the earlier losses are usually recovered after the results are announced. The results of the sales will be posted at 1:00 PM ET each day. If demand was strong, particularly from international investors, we should see mortgage rates improve during afternoon trading Wednesday and Thursday.
July’s Goods and Services Trade Balance data will be posted early Thursday morning, giving us the size of the U.S. trade deficit. It is expected to show a deficit of approximately $47.2 billion, which would be a decline from June’s $49.9 billion. However, I would consider this the least important of this week’s events, meaning it will likely have little impact on bond trading or mortgage rates unless it varies greatly from forecasts.
Overall, this week looks like it will be much less active for mortgage rates than last week.


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