Why Rates Will Hold 2011 Lows This Week
Rates remain at 2011 lows on mostly weaker economic reports. Below is a recap last week to today, newest first. Mortgage bonds rise on worse news, causing rates to fall and vice versa, so headlines are categorized accordingly. Rates should hold this week, which is dominated by May jobs reports (Wed and Fri) with latest on economic and consumer strength, and May manufacturing surveys (Wed and Fri) with latest on producer strength and inflation.
Bonds Rise, Rates Fall
-Case Shiller: U.S. Home Prices Fall to 8-Yr Low (S&P)
-Consumer Confidence Drops To 6-Mo Low In May (WaPo)
-Chicago area manufacturing 2nd biggest 1mo drop since Oct 08 (WSJ & ISM)
-Fed’s preferred consumer inflation measure (PCE) flat in April (BEA)
-April Pending Home Sales Drop After 2 Monthly Gains (NAR)
-2nd of 3 GDP readings 1.8% 1Q2011, down from 3.1% 4Q2010 (BEA)
-Prices on homes with Fannie/Freddie loans fall 2.5% in 1Q2011 (FHFA)
-April Durable Goods Fall 3.6% (Reuters)
-Greece default risk benefits U.S. bonds (last week. today’s update below.)
Bond & Rate Neutral
-April UofM Consumer Sentiment regains March losses (Bloomberg)
-Weekly jobless claims up 10k but continuing claims drop 46k (DOL)
-April New home sales up 7.3% but down 23% since April 2010 (Census)
Bonds Fall, Rates Rise
-Bonds lose slightly as stocks rally on Greece aid hope (Marketwatch)