Weekly Mortgage Overview: 3/4/2013

This week is employment week with February employment data out on Friday. The early estimate is for an increase of 165K jobs and 178K private jobs, the unemployment rate unchanged at 7.9%. Prior to the February employment data, the ADP private jobs is expected to show an increase of just 150K private jobs after the 192K ADP said in January; that will occur on Wednesday. No data on Monday and Tuesday; the only report is the ISM services sector index expected at 55.4, from 55.2 in January. The February ISM manufacturing index last week was stronger than the forecasts prior to the report. The Fed’s Beige Book, the Fed staffs details on FRM, the 12 Fed districts; normally not much new in the report but more specific details.

This is the beginning of the sequester that actually started last Friday. Before the sequester kicked in Friday there was a multitude of fear mongering from  the Administration that 170K jobs would be lost, flights delayed, the military would fall apart in our defense and school kids would see teachers lose their jobs. Since Friday, according the WSJ, those scare tactics are now being lessened with most of the Administration now saying the spending cuts won’t be felt for months, if then. Expect more debate through the week, and more fear tactics from both Democrats and Republicans. In the end the cuts will likely be avoided or softened as the impact begins to be felt.

The interest rate markets start Monday on a strong note; the 10-year not, however, must break below 1.85% to initiate anther move lower in mortgage rates. Europe is back in focus after the Italian election results brought default fears back after six months of quiet in the region. Some of the recent decline in rates is attributed to the EU concerns.