Rate Watch
As we discussed on Friday, mortgage rates were up at the end of last week. According to Freddie Mac's weekly survey, rates moved from the previous week's 6.12 percent to 6.23 percent. These are the highest rates we've seen since late December. The rise is attributed to last week's jobs report, which showed the potential for accelerating inflation and the Fed's 1/4 point increase in Fed Funds rate.
This week's economic calendar includes a couple of interesting Treasury auctions and the release of the international trade balance.
Treasury notes are sold at regularly scheduled public auctions, and two important ones are coming up this week. The 10-year and the 30-year Treasury auctions will be held on Wednesday and Thursday respectively. Both US Investors and Global institutions partake in these auctions. The US ec0nomy has been rather volatile as of late, and this might send investors and governments looking to non-US economies as safer bets to save their money. If the demand for treasury securities is low, this might trickle over to mortgage backed securities (MBS) as well. This would force sellers of MBS to increase yields in order to attract buyers. All of this translates into higher interest rates.
On Friday, the Bureau for Economic Analysis will release their report on International Trade. This report measures the difference between US imports and exports. The international trade balance has posted a deficit almost continuously since the 1980s. Typically, the higher the deficit, the weaker the dollar. When the dollar is weak, it costs more money to borrow it.
We should expect rates to go up this week. The Bankrate experts are pretty close to unanimous. 87% of them believe rates will continue to rise this week.
posted by Vincent Biondillo @ 9:29 AM
0 Comments:
Post a Comment
<< Home