Market Reports
A Mortgage update from Jay Skwierawski for the week of July 6
Good Morning Everybody!
I hope you had a great fourth of July holiday weekend!
Interest rates rose last week, even in the face of economic reports that would normally have brought rates down. We can blame the usual suspects for pushing rates upward instead of downward - the cost of oil and the weak dollar. Although news out on jobs and the economy was for the most part weak, inflation fears within the market were to tough too overcome. Here's a recap of the news out last week:
The Industrial Supply Manager (ISM) Index unexpectedly went up from being negative to slightly positive. U.S. Crude Oil Inventories increased, as more and more people are cutting back on fuel usage. The jobs report released on Thursday showed the unemployment rate staying at 5.5%, the same as the month before, while the country lost 62,000 jobs, which was in-line with expectations. However, April and May's job losses were both revised to show an additional 52,000 jobs lost in those months. Hourly earnings and the average work week both came in as expected. First time unemployment claims for last week surged to over 400,000, and the ISM Services Index came in worse than expected, which should have offset the first ISM number released earlier in the week. All in all, these reports should have brought rates down. It is quite possible that the markets had a bit of a sell-off due to the run-up they had the previous two weeks. That happens - traders sell to rake in profits that have been realized in times when any market goes up over a certain period of time.
This week does not bring a lot of economic reports, however the markets could still be in for some volatility with regards to the price of oil and the strength (or weakness) of the dollar. Here's what is in store for this week:
Wednesday - U.S. Crude Oil Inventories (Moderate impact on rates)
Thursday - Initial Jobless Claims (Moderate)
Friday - University of Michigan Consumer Sentiment Index (Moderate)
Friday - U.S. Balance of Trade (Moderate)
Although there is not a lot in the way of reports due out this week, there is a meeting in Rusutsu, Japan this week of the G8 group of nations. Ever hear that term and wonder what the G8 is? It is an international forum of governments from Canada, France, Germany, Italy, Japan, Russia, The United Kingdom, and The United States. They hold an annual economic summit, although this year they will also deal with climate change and the global food crisis. The reason that this year's meeting may have an impact on mortgage rates, is that there appears to be a concerted effort to shore up the dollar. A stronger dollar could help take away some of the pressures on the cost of oil, which could help on the inflation front. Remember that last week's rise in mortgage rates was probably due to a weakening dollar and rising oil prices.
As always, we will keep you posted on any major developments in the mortgage industry.
Have a great week!
Jay Skwierawski
President
First Sterling Mortgage Services, LLC
737 North Michigan Avenue, #1900
Chicago, IL 60611
312.268.7601
WE CLOSE ON TIME - EVERY TIME!
is a registered service mark of The Prudential Insurance Company of America. Equal Housing Opportunity. Midwest Realty Ventures LLC. All Rights Reserved.