Monday, February 14, 2011

Financial report expected this week could effect interest rates




 



The week’s first release is one of the highly important ones when the Commerce Department posts January’s Retail Sales data. This report is very important to the financial markets because it measures consumer spending. Since consumer spending makes up two-thirds of the U.S. economy, any related data is watched quite closely. If Tuesday's report reveals weaker than expected sales, the bond market should thrive and mortgage rates will fall since it would be a sign that the economy is not as strong as many had thought. However, a stronger reading than the 0.5% increase that is expected could lead to higher mortgage rates.



Wednesday brings us three economic releases in addition to the FOMC minutes. January's Housing Starts will be posted early Wednesday morning, giving us an indication of housing sector strength and mortgage credit demand. It usually does not affect rates unless the results vary greatly from forecasts. Current forecasts are calling for an increase in starts of new housing.



Fed Chairman Bernanke will speak before the Senate Banking Committee Thursday morning and overseas Friday morning. Neither engagement is expected to bring any new theories or give an indication of the Fed’s next move to boost or limit economic activity. The markets always watch his words, but I would be surprised if either of these lead to changes in mortgage rates.



 



This information courtesy of Joe Patterson with Princeton Capitol



Thanks Joe!

No comments:

Post a Comment