Economic Calendar, May 18, 2009: What's Moving Mortgage Rates This Week?

May 19th, 2009 12:11 AM

Economic Calendar, May 18,2009: What's Moving Mortgage Rates This Week?

Via Robert Rauf (REMN The Real Estate Mortgage Network):

 This Weeks Economic Calendar, and Rate Forecast:

 The Economic Calendar is a pretty light one this week.... But that doesn't mean it will not be a bumpy ride. This will be a holiday shortened week which always throws a wrench into the works... More on that below.

As far as the calendar goes, we have a few numbers, Some Fed Buying and Some Fed News, here is the week ahead:

• Monday May 18: The first of three days where the Fed will be buying Treasury obligations. It is always better for a market to have an extra buyer tossing money into the mix, so we should see some positive reaction in the markets today, But this afternoon we had somewhat of a sell off. We still have an hour left to see what happens.
• TuesdayMay 19: April Housing starts and Building permits expected up 1.9% and up 2.7%. These seem like good news that would be bad for rates-- BUT, Up from NOTHING is still a weak number. Housing starts are still near lows not seen since 1959. It is not likely to influence the markets today.
• Tuesday: More Fed buying by the end of the day.
• Wednesday May 20: Third day of Fed purchases winds up today. Prior to this week the Fed has spent $101 Billion of the $300 Billion they have in their piggy bank to make direct Treasury Security purchases. Buyers usually are good to keep a market happy.
• Wednesday: The Fed releases the minutes of the April Meeting. Seen as a boring bit of news, it will likely be a non event for the week.
• Thursday May 21: Initial Jobless Claims, expected down 7,000. This is the first decline in quite some time, a spark of good news, but not likely to move the market.
• Thursday: April Leading Indicators, expected up 0.8%. LEI is considered to show the economic path for the next 3 months or so, but in this case the upward surge in the number is likely caused by an improving stock market. If we see stock prices steady or lower by Thursday it is not likely to cause any move in the markets, If stocks rally and/or the LEI is higher than forecast we may see rates bump up.
• Friday May 22, Market closes at 2pm for the long weekend.
• Monday: MEMORIAL Day, Market is closed.  My Next report should be ready for Tuesday.

Stocks will be the driving force this week in the absence of any real data... As stocks improve we will see mortgages get hurt, but the reverse is true as well. If we see a sell off in stocks it is likely we will see a flight to quality driving the prices up in the credit markets and the yield down.  Luckily this week we have Uncle Sam in Buying Mode rather than selling mode. This should help keep things fairly steady.  The True "Biggie" of the Week is the shortened week.  Traditionally we see conservative trading at the end of a week like this. It is usually the Junior traders left to watch the shop while their bosses take advantage of the long weekend and no one seems willing to make any big moves since they don't want to be yelled at on Tuesday morning.  Light volume in the week is also more likely to cause a bumpy ride since lower volume can yield more volatile trading. Foreign markets are also open on Monday, that adds to the conservative behavior of our markets ahead of the holiday.

My gut says: CAUTION, but we may see slightly better rates this week.

HAPPY MEMORIAL DAY! 

Rob

Robert Rauf

Mortgage Banker

www.RobertRaufHomeLoans.com   or my blog: http://activerain.com/blogs/rrauf

(732)223-1630 x102

Since 1987 I have been helping my clients fulfill their dream of home ownership!

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