Daily Commentary by Larry Baer: With
nothing on the economic calendar for investors to chew on today look for
trading activity in the stock markets to strongly influence the short-term
trend trajectory of mortgage interest rates.
Higher stock prices will likely drag mortgage interest rates slightly
higher while lower stock prices will tend to be supportive of steady to perhaps
fractionally lower mortgage rates.
Looking ahead to the coming week -- Tuesday's
release of the March New Home Sales figures and Friday's first-quarter Gross
Domestic Product report will take a distant backseat to the release on
Wednesday afternoon of the Federal Open Market Committee's post-meeting
statement, to be followed in short order by the release of the Fed's official
economic forecast and concluding that same afternoon with a press conference by
Fed Chairman Bernanke. Thursday
morning's initial weekly jobless claims report will draw lots of attention as
mortgage investors debate whether to nudge rates lower because the economy is
beginning to cool again - or whether to nudge rates higher because economic
growth is on the threshold of another expansion phase.
Scattered among this very active week of
economic news and events the Treasury Department will be conducting a
three-part auction. Uncle Sam will look
to sell $35 billion of 2-year notes on Tuesday, $35 billion of 5-year notes on
Wednesday and $29 billion of 7-year notes on Thursday.
The mortgage market has been nestled in a
very sleepy 46 basis-point (14/32nd) trading range this week - but
that condition will be vulnerable to a rude adjustment over the coming five
business days. Heads up.
THE
MARKET IS ALWAYS RIGHT! . YOU AND I ARE SOME OF THE TIME
