Weekly Mortgage Overview: 12/31/2012

By December 31, 2012Mortgage Overview

This week starts with more negotiations in Washington on the debt talks and tax increases. Over the weekend there were many meetings but as has been the case, nothing of substance that can get any agreement. The stock and bond markets are starting quietly this morning with the Senate scheduled to convene at 11:00 am. There is still the potential something may get accomplished at the last minute; based on talks so far, though, we wouldn’t bet on it. Going over the Cliff isn’t as significant as media has made out; tax increases that are due to kick in tomorrow can easily be negated in a retroactive bill. Neither side wants taxes higher except the President on high income earners.

The week has a number of key economic reports but not until Wednesday. This is employment week; early estimates are non-farm jobs increasing by 150K, non-farm private jobs +145K, the unemployment rate unchanged at 7.7%. Various economic reports over the last few weeks have had less direct market impact with all focus on the Cliff talks. Also this week: both December ISM indexes, manufacturing and services, November construction spending, weekly claims, and November factory orders. Technically the 10-year note and MBS markets are essentially neutral awaiting the results from Washington.