Weekly Mortgage Market Overview: 6/25/12

The Week the Supreme Court rule on Obamacare, likely on Monday. Europe of course is the dominant factor these days for the outlook on the economy and US interest rates. Thursday and Friday there is another EU summit meeting scheduled, will there be any significant progress to develop a long range plan to boost its economies and support the weakening banking sectors? A betting person, given the past performances over the last two years, would bet no. There are a number of key data points today; following the FOMC statement and new forecasts from the Fed that the US growth is slowing, data on the economy will be a main focus over the next month or so. Also this week Treasury will auction 2s,5s, and 7 yr notes for a total of $99B; the 2s and 5s will be interesting in light of the Fed extending Operation Twist, the 7 yr note should see the best demand this week.


The key points this week; May new home sales on Monday, June consumer confidence index on Tuesday, May durable goods orders on Wed, weekly jobless claims on Thursday and May personal income and spending on Friday along with the Chicago June purchasing mgrs. index and the final U. of Michigan consumer sentiment index. Mortgage interest rates along with the 10 yr note are trading in a narrow range for the last few weeks. What comes out of Europe this week will continue to impact interest rates. Any significant relaxing of the fear factor will likely work against the bond market as the safety trades will be lessened.