Weekly Mortgage Overview: 5/20/2013

This Week

Not much on the calendar this week until Wednesday. Wednesday has April existing home sales and two other key events: Ben Bernanke is scheduled to testify to the Joint Economic Committee on the state of the economy; and the FOMC minutes from the 5/2 FOMC meeting. The minutes are always revealing; this time maybe not as much as the meeting was a day before the stronger than expected April employment report. Bernanke’s testimony should be interesting with markets presently debating when the Fed would begin unwinding its QEs, and the economy is debatable with mixed readings being reported almost daily.

Thursday has new home sales for April, expected to be a little better than March. Weekly jobless claims increased 32K last week; this week the expectations are for claims to have declined 12K to 348K. This week leads into the Memorial Day holiday that will likely reduce trading volume as many will add to the holiday. The US bond market remains bearish; Friday the 10-year closed at 1.95%. a level we believe may hold the increase in rates for a while. That said, though, there is little reason now to expect interest rates will decline much on any improvements. Besides the economic data, the main concern in the fixed income market now is when the Fed will actually begin to extract itself from supporting the bond and mortgage markets.