Monday Market Commentary

by Alex Stenback on November 12, 2007

1112rates
                                                                 Graphic via MSNBC
Last Week:
The Dow shed some 600 points, and Treasuries rallied. This would normally have mortgage bonds, and rates, improving, but they did not (though they are still holding near the low point for the year.) This tells me that the concern over the credit quality of mortgage related assets, which to this point have been limited mostly to the private mortgage backed securities market, may be seeping into the conforming, or Agency market (Fannie, and Freddie.)  Note that these types of home loans have been performing well, and have not seen delinquencies spike, so this is likely a short lived phenomenon, unless delinquencies in this space mount.
This Week:
Bond markets closed today.  When trading resumes, the big events on the economic calendar will be the inflation metrics – Producer prices on Wed (PPI) and the Consumer Price Index (CPI) Thursday.  Indications of inflation will put upward pressure on mortgage rates.  Retail sales and the Philidelphia Fed Index, (a key measure of economic strength) also bear watching.
This Week’s Economic Calendar [Barron's]

{ 1 comment… read it below or add one }

max November 15, 2007 at 9:46 pm

Good article! Thanks
max
http://www.nycmortgage.us

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