Mortgage Rates Hold Steady Following Employment Data
Posted 01-11-2010 at 08:12 AM by VictorBurek
Last week ended on somewhat of a disappointing note for mortgage rate watchers. Despite a worse than expected non farm payroll number, mortgage backed securities were unable to sustain a rally which would lower consumer borrowing costs. Immediately following the release of the data early Friday morning, MBS did move considerably higher only to give back most of the gains as the day progressed. All in all, MBS did close in the green but the gains did not justify lenders issuing new rate sheets.
There is no economic data being released this morning. We do have some Fed speak with Atlanta Federal Reserve Bank President Dennis Lockhart speaking about the economy to the Rotary club of Atlanta. Anytime Fed officials speak, market participants pay attention for any hint of future monetary policy and their outlook on the economy. In light of recent inflation worries, investors will pay close attention to any mention of heightened inflation and fed tightening of monetary policy.
Here are the highlights for the upcoming week. Thursday’s and Friday’s data will be the most impactful. As a general rule, worse than expected economic data benefits the fixed income markets, while better than expected data benefits equities.
Tuesday
- International Trade
- Philadelphia Federal Reserve Bank President Charles Plosser speaks to the Entrepreneurs Forum of Greater Philadelphia.
- $40billion of 3 year notes up for auction.
Wednesday
- MBS Applications Index
- $21billion of 10 yr notes up for auction
- Beige Book
Thursday
- Retail Sales
- Jobless Claims
- Import and Export Prices
- $13billion of 30 year bonds up for auction
Friday
- Consumer Price Index
- Empire State Manufacturing Index
- Industrial Production
- Consumer Sentiment
Reports from fellow mortgage professionals indicate lender rate sheets to be similar to Friday’s. The par 30 year conventional rate mortgage remains in the 4.875% to 5.125% range for well qualified consumers. To secure a par interest rate you must have a FICO credit score of 740 or higher, a loan to value at 80% or less and pay all closing costs including an estimated one point loan origination/discount/broker fee. You may elect to pay less in upfront fees, but you will have to accept a higher interest rate.
There is no economic data being released this morning. We do have some Fed speak with Atlanta Federal Reserve Bank President Dennis Lockhart speaking about the economy to the Rotary club of Atlanta. Anytime Fed officials speak, market participants pay attention for any hint of future monetary policy and their outlook on the economy. In light of recent inflation worries, investors will pay close attention to any mention of heightened inflation and fed tightening of monetary policy.
Here are the highlights for the upcoming week. Thursday’s and Friday’s data will be the most impactful. As a general rule, worse than expected economic data benefits the fixed income markets, while better than expected data benefits equities.
Tuesday
- International Trade
- Philadelphia Federal Reserve Bank President Charles Plosser speaks to the Entrepreneurs Forum of Greater Philadelphia.
- $40billion of 3 year notes up for auction.
Wednesday
- MBS Applications Index
- $21billion of 10 yr notes up for auction
- Beige Book
Thursday
- Retail Sales
- Jobless Claims
- Import and Export Prices
- $13billion of 30 year bonds up for auction
Friday
- Consumer Price Index
- Empire State Manufacturing Index
- Industrial Production
- Consumer Sentiment
Reports from fellow mortgage professionals indicate lender rate sheets to be similar to Friday’s. The par 30 year conventional rate mortgage remains in the 4.875% to 5.125% range for well qualified consumers. To secure a par interest rate you must have a FICO credit score of 740 or higher, a loan to value at 80% or less and pay all closing costs including an estimated one point loan origination/discount/broker fee. You may elect to pay less in upfront fees, but you will have to accept a higher interest rate.
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