The Mortgage Update

Treasuries rose yesterday after the lower than
expected retail sales report, and continued to open
higher this morning. We then gave back some of this
mornings gains following the CPI report, which showed
that cost of living in the US rose in June. The big news
of the week will be Bernanke's two-day testimony
which is set to kick off tomorrow.

This Week's Economic Releases

Mon

8:30 AM

Retail Sales

8:30 AM

Empire Manufacturing Survey

Tues

8:30 AM

Consumer Price Index

9:15 AM

Industrial Production

Wed

8:30 AM

Housing Starts

2:00 PM

Beige Book

Thurs

8:30 AM

Jobless Claims

10:00 AM

Philly Fed Survey

The Mortgage Update

Lots of economic news on the schedule this week, which means we might see more market volatility. Treasuries fell this morning before economists forecast U.S. Retail Sales Increased while inflation held in check. The headlining event this week, is Ben Bernanke when he will deliver his semi-annual monetary policy report to Congress on July 17-18 in Washington. But, those are worries for another day. Today we will watch and see if economic growth meets policy marker’s goals and contemplate our favorite word—tapering.

The Mortgage Update

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The Mortgage Update

Treasuries rose for a fifth day after Ben Bernanke signaled the central bank will need to keep buying bonds for the foreseeable future. Treasuries auctions this week suggest demand for safer assets is increasing, which could be good news for the mortgage markets as well. It’s a slower news day with Producer Price Index due out at 8:30 and Consumer Sentiment at 9:55. Forecasts suggest PPI will increase .5% and Consumer Sentiment Index will remain unchanged from June. Let’s see if we can sustain this rally into the weekend.

The Mortgage Update

Yesterday it looked like the MBS market was going to another rough day prior to the FOMC minutes being released; let’s call it the ‘Bernanke effect.” However, when he took the stage later in the day, he appeared to be bullish on the bond market. He stated the unemployment rate overstated the health of the economy and asset purchases are not having a significant impact on supply and demand of safe assets. Did you hear that bond market? Calm down. Today is another jobless day, with Initial Jobless Claims released at 8:30. Let’s see if we can sustain this nice little rally we have going on…

The Mortgage Update

Mortgages are fairly flat this morning as we lead into
the FOMC Minutes to be released later this afternoon
at 2PM. Typically, the market will scrutinize every single
word of the document to look for clues on the next
move the Fed will make, and speculation is still running
rampant that they will be cutting their bond purchases
in the near future. The language in today's meeting
minutes could provide further indication of this, which
ultimately could be bad for bond prices. Guess we will
all get our popcorn popped and ready for the show at 2.