This holiday-shortened trading week brings us the release of eight monthly or quarterly economic reports in addition to two semi-relevant Treasury auctions.
None of the releases are considered to be highly important to the markets and mortgage rates, but several of them do have the potential to cause some movement in rates. The more important news comes later in the week. Therefore, we may see more movement in mortgage pricing as the week progresses.
There is nothing of relevance scheduled for release tomorrow. This means we can look towards the stock markets for guidance on bond and mortgage rate direction. The Europe debt crisis will likely be in the headlines this week as leaders move to avoid downgrades by credit rating agencies that would be equivalent to adding gasoline to the fire. If the actions taken overseas are strong enough to calm investor fears here, stocks may bode well for the week, making it difficult for bonds to rally and push mortgage rates lower. On the other hand, if it becomes evident that the downgrades to their debt are unavoidable, fears about the impact they would have on the global economy will probably fuel stock selling and bond buying here. The latter would be good news for mortgage rates.
Tuesday’s only data is November’s Housing Starts, but it is the week’s least important data. I don’t see it causing much movement in mortgage rates unless it shows a huge variance from expectations. It is expected to show little change in construction starts of new homes, hinting at a flat housing sector last month.
Generally speaking, an increase in new starts would be bad news for bonds and mortgage pricing, but unless there is a significant surprise it will likely have little impact on Tuesday’s mortgage rates.
November’s Existing Home Sales figures will be posted late Wednesday morning. This release will come from the National Association of Realtors while its sister release, Friday’s New Home Sales data, is a Commerce Department report. Both give us a measurement of housing sector strength and mortgage credit demand, however, neither is considered to be of high importance. And both of the reports are expected to show increases in sales, indicating housing sector growth. Weaker than expected readings would be considered positive for bonds and mortgage rates because they hint at a still weakening housing market. But unless the actual readings vary greatly from forecasts, the results will probably have little or no impact on mortgage rates.
Thursday brings us the release of three reports, with the first being the final revision to the 3rd Quarter Gross Domestic Product (GDP). I don’t think this data will have an impact on mortgage rates unless it varies greatly from its expected reading. Last month’s first revision showed that the economy expanded at a 2.0% annual pace during the quarter and this month’s revision is expected to show no change. A revision higher than the 2.0% rate that is expected would be considered bad news for bonds. But since this data is quite aged at this point, I don’t think it will have much of an impact on mortgage rates Thursday.
No comments:
Post a Comment