Mortgage Rates Aim for New Records, July 30, 2010

Mortgage Rate Trend Direction:     Down

Economic Reports/Impact:             Advance GDP, 8:30 AM ET, Moderate Rate Impact

                                                             Chicago PMI, 9:45 AM, ET, Low Rate Impact

                                                             Consumer Sentiment, 10:00 AM ET, Moderate Rate Impact

Key News:                                         US and European Companies Earnings

Summary

Friday's are often volatile days in the market, particularly in the mornings.  Today should be no exception as a good deal of data will be availale to provide a read on the economy.  Based on the expectations from the Advance GDP report, the Chicago PMI report and Consumer Sentiment Report, today could be a good day for mortgage pricing.  Mortgage rates are expected to decline from yesterday's level when lenders release initial pricing between 9:45 AM ET and 10:15 AM ET.      

Impact of economic reports

Advance GDP came in at or slightly lower than expectations this morning.  This report measures the total output of the US economy and shows growth, but growth that is slowing.  The Chicago PMI report measures manufacturing activity in the Chicagoland area and is expected to also show a decline in activity.  Consumer sentiment has been declining steadily over the past few months and this tred is expected to continue in today's report.  Any positive surprise could temper the rise in mortgage-backed securities prices this morning.

Impact of international or political events

The stock markets in Europe are down across the board today despite some good earnings news from European companies and positive economic data from Sweeden.  Markets are responding to the lowered growth prospects in the US.

Asian markets, likewise, are down in trading today.  Japan's economy appears to be weakening and several companies in that nation have reported negative earnings.  The Chinese economy is difficult to guage since so much of the activity is government controlled.  There is clearly a lot of building, and infrastructure growth going on, but the difficulty lies in determining the true growth in consumer goods sales both internally and through exports.  With economic growth slowing in the US and Europe, internal consumption will be increasingly more important to keep China's economy growing.