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Kenton Becker,
Sr. Loan Officer
Phone: 206-686-8822
Cell: 206-423-2552
Fax: 206-309-4736
MLO/NMLS #123961
Email Me
22525 SE 64th Place
Suite 220
Issaquah, WA 98027
Events Last Week:
Housing Starts Fell
Philly Fed Down
Jobless Claims Rose
Manufacturing Mixed
Events This Week:
Tues 2/26
Bernanke Speaks
New Home Sales
Wed 2/27
Durable Orders
Pending Sales
Thur 2/28
GDP
Chicago PMI
Fri 3/1
ISM Manuf.
Core PCE
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Italian Uncertainty Helps Mortgage Rates
The biggest influence on mortgage rates last week
came from the Italian
election, which reignited investor concerns about
Europe and prompted a
flight to safer assets. Fed Chief Bernanke
continued to show strong
support for the Fed's bond buying program, which
was also positive for
mortgage rates. As a result, mortgage rates ended
the week lower.
The election in Italy showed very close
results between the
top three candidates, and it will be very
difficult to establish a
coalition government when no party has a majority.
A long period of
negotiations will take place, and another election
may be required. What
is clear is that there is widespread opposition in
Italy to the austerity
measures supported by the European Union (EU).
Investors are concerned
that the third largest economy in the EU will
scale back reform measures,
which could increase the risk that Italy will
default on its debt or leave
the EU. Investors shifted to safer assets,
including US mortgage-backed
securities (MBS), which helped mortgage rates
improve.
Topping the
US economic news last week were the implementation
of mandated, across the
board, government spending cuts on March 1 at
midnight. Government spending
will be reduced by $85 billion over the next seven
months unless action is
taken. While the cuts will slow economic growth to
some degree, this
represents just 2% of government spending, and the
reaction in financial
markets has been minimal. Investors are looking
ahead to the more
significant March 27 deadline. Last year, Congress
passed a "stop-gap"
continuing resolution to fund the federal
government through March 27. New
legislation must be passed before then to avert a
government shutdown.
Also Notable:
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Fourth quarter GDP was revised
higher to 0.1% from -0.1%
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Core PCE inflation was just 1.3%
higher than one year ago
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Pending Home Sales rose 5% to the
highest level since April 2010
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Moodys cut the credit rating of the
sovereign debt of the UK
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| Average
30 yr fixed rate: |
| Last week: |
+0.02% |
| This week: |
-0.07% |
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| Stocks
(weekly): |
| Dow: |
14,050 |
+50 |
| NASDAQ: |
3,150 |
+10 |
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This Week
The biggest economic
report this week will be the important
Employment
data on Friday. As usual, this data on the
number of jobs, the
Unemployment Rate, and wage inflation will be
the most highly anticipated
economic data of the month. Before the
employment data, ISM Services will
be released on Tuesday. The Fed's Beige Book and
Factory Orders will come
out on Wednesday. Productivity and the Trade
Balance are scheduled for
Thursday. Negotiations on the US budget and on
Italian leadership could
also have a significant impact this week.
©2013 MBSQuoteline |
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