Daily Commentary by Larry Baer: The
few traders still at their desks this morning are putting the finishing touches
on their risk management strategies in front of next week's potential price
volatility.
Mortgage investors will focus on the upcoming
back-loaded economic calendar for clues as to whether another interest rate
friendly round of bond purchases from the Fed may be in the cards before the
summer is over. Thursday's 8:30 a.m. ET
release of revised Q1 Gross Domestic Product figures together with Friday's May
Nonfarm Payroll report will be key pieces of evidence. If, as expected, first-quarter economic
growth as represented by GDP posts a reading of 2.0% or more and May nonfarm
payrolls hit 150,000 or so - the hope for more interest rate from the Fed will
fade rather sharply. Under this
condition mortgage interest rates will almost certainly creep higher. In my judgment it will likely take a revised
Q1 GDP number of 2.0% or less together with a May nonfarm payroll number of
125,000 or less to support the prospects for yet lower mortgage interest
rates. While such an outcome is
certainly possible - at this juncture it does not appear to be very probable.
THE MARKET
IS ALWAYS RIGHT! . YOU AND I ARE SOME OF THE TIME
