Mortgage Rates Inclined to Move, July 14, 2010

Mortgage Rate Trend Direction:          Neutral/Down

Economic Reports/Rate Impact:           Import Prices, 8:30 AM ET, Moderate Rate Impact

                                                                 Retail Sales, 8:30 AM ET, High Rate Impact

Key News:                                               US Companies Earnings, European Banks

 

Summary

 

Today, unlike recent days, brings quite a bit of economic data to provide guidance to the markets. Earnings and the 3^rd quarter projections from Intel were released after the market closed yesterday. The Import Prices and Retail Sales reports released early this morning are likely to provide the initial direction for mortgage rates today.

 

European stocks are flat today while Asian stocks have closed moderately higher. The US Stock market is flat in early trading this morning. Yesterday the mortgage-backed securities market lost substantial ground at the very end of the day but has regained that ground and more in early trading. Consequently, mortgage rates will likely be neutral to slightly lower at initial pricing this morning with an inclination to move lower. An afternoon auction of 30-year US Treasury bonds and the release of the notes from the last Federal Open Market Committee may provide further direction.

 

Impact of economic data released today

 

Import Prices for goods brought into the US, but produced elsewhere, declined modestly. The Retail Sales report indicated that US consumers are still being conservative in their spending, though it has increased from last month. With no surprises in these initial reports today the stock market and mortgage pricing may be in a holding pattern for much of the morning until additional data is released.

 

Impact of international or political events

 

A report from a European bank analyst projects that 11 banks are likely to fail the “stress tests” that are underway to assess the soundness of European banking sector. This news is likely to support concerns that European economies are very weak and potentially could impact worldwide economic growth.