For the first time in eight trading sessions mortgage-backed securities prices are increasing sending mortgage rates lower. This turnaround is due in large measure to worries about China and weaker than expected economic data in the US. These better rates will not likely last beyond today if, as expected, retail sales figures released tomorrow are strong. For consumers needing a home mortgage for a purchase of a new home or to refinance an existing one, today offers a great opportunity to lock-in their interest rate.
In China trade figures continued to show a decline in the trading surplus enjoyed versus other countries. This continues a trend of the past few months, with China’s overall exports declining modestly. Some analysts are beginning to point to real structural issues in China’s economy (inflation, bad loans) as presenting concerns for the broader economy. Should China’s economy slow significantly it will likely cause a similar result in economies across the globe.
In the US jobless claims figures showed that the labor market is holding pat. Claims stayed roughly the same near 400,000, their recurring level of the past six months. The good news is that there were no signs that the US economy was slipping into recession. Also in the US, trade balance figures came in close to expectations, though slightly better than forecasts.
The biggest news in the US this morning is probably the disappointing earnings announcement from banking stalwart JP Morgan, considered the strongest of the major banks. Net income for the past quarter was lower than forecasted by the bank, leaving investors to speculate that other banks will likely share the difficulties experienced by JP Morgan. The bank blamed a slowdown in investment banking deals due to the European debt and banking crisis.
Today’s one-day reprieve for current mortgage rates will come to an end tomorrow if retail sales figures do indeed accelerate at a six month high rate as expected. With retail sales representing 70% of our economy, this report is arguably the most important measure of the US economy’s strength.
Enjoy today, for tomorrow is another day!
Loading ...
RSS feed for comments on this post.
Leave a comment