Market Update Week Ending April 20, 2012
Thanks to Jackie Fowler at Regions for this mortgage market update
Investors saw little this week to cause much movement in mortgage rates. The Spanish debt auctions received surprising demand, and disappointing US economic results were not weak enough to shift investor sentiment toward safer assets. In the end, mortgage rates finished the week with little change.
In a market looking for positive economic momentum, this week's data provided little encouragement. With the exception of Industrial Production, every measure announced reflected a slowdown in its rate of economic growth. The growth rate of manufacturing activity saw the biggest drop. Retail Sales growth slowed from last month and Industrial Production showed no growth for the second month in a row. This fresh data may take on more significance as the Federal Open Market Committee (FOMC) meets next week. Economic growth rates were generally on the rise ahead of the last FOMC meeting.
The measures of housing activity released during the week were disappointing as well. The Home Builder Sentiment Index fell for the first time in seven months. March Housing Starts fell 6% from February and Existing Home Sales backed up 2%. The silver lining in all this, though, is that over the last few weeks mortgage rates have moved back to near their historical lows.
- Weekly Jobless claims rose to 386K, the highest since early this year
- Spanish bond auctions saw adequate demand
- Leading indicators fell to 0.3% from 0.7% last month
- Regional manufacturing activity slows from March
The big story next week will be Wednesday's Fed meeting. Investors will be trying to determine the likelihood of additional easing. New Home Sales and Consumer Confidence will be released on Tuesday. Durable Orders will come out on Wednesday. Pending Home Sales will be released on Thursday. First quarter GDP, the broadest measure of economic growth, will come out on Friday. In addition, there will be Treasury auctions on Tuesday, Wednesday, and Thursday.
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