Mortgage News for July 6th 2009

I hope everyone had a great Independence Day and had a safe 4th of July. Monday's bond market has closed in negative territory despite a day of ups and downs. The stock markets are starting the week with minor losses as concerns over this week's events prevent gains in the major indexes. The Dow closed up 44 points while the Nasdaq lost 9 points. The bond market closed down 28/32, which should push tomorrow morning's mortgage rates lower by approximately .125-.25 of a discount point over Monday's morning rates.

This week brings us the release of only two monthly economic reports and they both will be posted this Friday. It also is the beginning of corporate earnings season that can lead to significant volatility in the stock markets and has the potential to influence bond trading and mortgage rates. So far this year it has been a mixed bag with corporate earnings with some companies showing a higher than expected gain or a better outlook on the losses.

There are a couple of Treasury auctions that are scheduled to take place this week, with some that took place today. This sale isn't exactly the most important auction of the week, but with no relevant data being posted until later in the week it may influence bonds and possibly mortgage rates if we see a very strong or extremely poor demand from investors. So don't go burying your savings in the backyard quite yet.
President Obama has announced that he will need to reappoint Ben Bernanke the current Fed Chief or appoint a new head of the department. All the analysts predict that President Obama will keep Bernanke in place in order to keep on his plan of economic restructure.

Overall, we are expecting to see a very active week in mortgage rates. So far no day in particular will be the most important of the week. Friday is the easy candidate with two monthly reports scheduled to be posted, but neither is considered to be a major release. Wednesday is also a possibility due to the 10-year Note auction and the opening act of earnings season. I suspect that we may see some pressure in bonds the first part of the week unless the major stock indexes continue Thursday's selling.