2680 South Val Vista Drive, Suite 101
Gilbert, AZ 85295
My Blog
Mortgage Market for week of August 29, 2016
Posted On: August 30th, 2016 9:31PM
Last week mortgage rates experienced a fairly strong run until Friday afternoon. Fed Chair Janet Yellen’s speech, in Jackson Hole, Wyoming, proved to be the highlight of the week as widely expected. Yellen mentioned that the argument for further tightening of monetary policy is getting stronger. The market actually rallied a bit off of the initial comments; however, Fed Vice Chair Fischer’s subsequent comments to the press were a bit more hawkish. When asked whether Fed watchers should be looking for a possible rate hike in September, and possibly for two hikes this year, Fischer said, “What the chair said today was consistent with answering ‘yes’ to both of your questions.” The market sold off following Fischer’s comments, pushing the 10yr yield above 1.60%.
This week’s domestic economic and international data and events are likely to have a bit more of a pronounced impact on markets, as expectations of rate hikes in 2016 have increased. In addition to a week full of domestic economic data, we have a number of Fed speakers, including the Fed's Rosengren, Evans and Kashkari on Wednesday, Mester on Thursday, and Lacker on Friday.
Market participants will be highly focused on their speeches to determine if the members of the Fed share a consensus and foresee raising rates this year. Overseas Bank of Japan Governor Kuroda said that Bank of Japan won't hesitate to ease policy if needed, and the European Central Bank’s (ECB) Benoit Coeure reiterated that the ECB may have to do more if governments do not act.
Economic Calendar for the week of 08/26/2016 to 09/02/2016:
Monday: Personal Income, Personal Spending, PCE Deflator, PCE Core, Dallas Fed Manufacturing Activity
Tuesday: S&P CoreLogic CS 20-City NSA Index, Consumer Confidence
Wednesday: MBA Mortgage Applications, ADP Employment Change, Chicago Purchasing Manager, Pending Home Sales
Thursday: Challenger Job Cuts YoY, Nonfarm Productivity, Unit Labor Costs, Initial Jobless Claims, Continuing Claims, Bloomberg Consumer Comfort, Markit US Manufacturing PMI, Construction Spending MoM, ISM Manufacturing, ISM Prices Paid, ISM New Orders
Friday: Change in Nonfarm Payrolls, Change in Private Payrolls, Change in Manufacturing Payrolls, Unemployment Rate, Average Hourly Earnings, Change in Household Employment, Labor Force Participation Rate, Underemployment Rate, ISM New York, Factory Orders, Durable Goods Orders
