Another volatile week for mortgage rates, which finished worse by roughly .125%. This was a tad unusual in that most of the economic data was negative. Negative economic news normally helps mortgage bonds/rates, but last week also had two wild cards:
1.) Dallas Fed President Fisher threw a bucket of cold water on the market (see our quote of the day from Thursday.)
2.) Rumors swirling that the ISM services index (a key measure of retail sector strength) was either miscalculated, or will be subject to upward revision, so perhaps was not as bearish as indicated.
Despite the otherwise bond/rate friendly news of the week, those two factors put upward pressure on rates.
An empty economic calendar until Wednesday’s Retail Sales means we could see some stock driven volatility as the market digest & assess credit market fears. Retail sales number will get a thorough going over as indications in the retail sector have been poor. And of course, we’ve got Fedspeak by none other than Fed chair Bernanke, who’s testifying before congress on Thursday, and may give some market-moving hints as to the Fed’s current stance on inflation and further rate cuts.
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