Here is this week’s market update. Rates improved somewhat last week, so if you know anyone holding out on a refinance now is a good time to take action! As always, feel free to call me anytime with questions or if there is anything I can do to help!
Market Comment
Mortgage bond prices ended slightly higher last week, which pushed mortgage interest rates lower. The Euro debt crisis continued to take center stage. The European Central Bank cut rates in a move to help avoid another recession in the region. Economic activity in Europe slipped in recent months as the debt crisis expanded and solutions were fleeting. This global economic uncertainty sent flight to quality buying of US mortgage-backed securities. MBSs traded in a choppy but tight pattern throughout the week. Stocks were volatile but held most of the recent gains as the limited data was generally stock friendly. Mortgage bonds ended the week better by approximately 3/8 to 1/2 of a discount point
LOOKING AHEAD
| Economic | Release | Consensus | |
| Treasury Auctions Begin | Monday, Dec. 12, | None | Important. There will be auctions Monday 3Y, Tuesday 10Y, Wednesday 30Y, and Thursday 5Y TIPS. |
| Retail Sales | Tuesday, Dec. 13, | Up 0.6% | Important. A measure of consumer demand. A smaller than expected increase may lead to lower rates. |
| Fed Meeting Adjourns | Tuesday, Dec. 13, | No rate changes | Important. Few expect the Fed to change rates, but some volatility may surround the adjournment of this meeting. |
| Weekly Jobless Claims | Thursday, Dec. 15, | 379k | Important. An indication of employment. Higher claims may result in lower rates. |
| Producer Price Index | Thursday, Dec. 15, | Unchanged, | Important. An indication of inflationary pressures at the producer level. Lower figures may lead to lower rates. |
| Industrial Production | Thursday, Dec. 15, | Up 0.6% | Important. A measure of manufacturing sector strength. Weakness may lead to lower rates. |
| Capacity Utilization | Thursday, Dec. 15, | 77.4% | Important. A figure above 85% is viewed as inflationary. Weakness may lead to lower rates. |
| Philadelphia Fed Survey | Thursday, Dec. 15, | 2.4 | Moderately important. A survey of business conditions in the Northeast. Weakness may lead to lower rates. |
| Consumer Price Index | Friday, Dec.16, | Unchanged, | Important. A measure of inflation at the consumer level. Lower figures may lead to lower rates. |
Retail Sales
Retail sales data is the first indication of weakness or strength in consumer spending released each month. The Bureau of the Census of the US Department of Commerce provides information on how much the consumer spends on the purchase of goods. This data provides the consumption part of the gross domestic product. Retail sales data represents merchandise sold for cash or credit by retailers. Durable goods, such as autos, make up 35% of the figure. The balance consists of non-durables such as gasoline, restaurants, and general merchandise. There are several drawbacks to the report. The data covers purchases of goods only, not services. It is also not adjusted for inflation and is extremely volatile. Economists are concerned that the current economic uncertainty will continue to curtail consumer-spending habits especially heading into the holiday season.
Mark Ruhl
NMLS #105591 | Loan Officer
Mortgage Express
Direct 503.517.9341
Cell 503.317.7620
Fax 503.961.8694
