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Events
This Week:
Employment
Mixed
PCE
Inflation Low
Pending
Sales Fell
Manufacturing
Down
Events
Next Week:
Tues
3/9
3-yr Auction
Wed
3/10
10-yr Auction
Thur
3/11
Trade Balance
30-yr Auction
Fri
3/12
Retail Sales
Sentiment
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Mixed
Data Affects Rates
Economic
data was the primary force driving mortgage rates this week. Generally
weaker than expected data resulted in modest improvement in rates for most
of the week. This was completely offset by an increase in rates on Friday
due to stronger than expected Employment data, however, leaving mortgage
rates nearly unchanged from last week.
Against
a consensus forecast for a decline of -50K jobs, the economy lost -36K jobs
in February, and the revisions from prior months showed more jobs than
previously reported. The Unemployment Rate remained unchanged from January
at 9.7%, which was lower than expected. The payrolls figures and the
unemployment rate are calculated from two separate sets of data. The
payrolls report focuses on larger companies, while the unemployment survey
covers all companies. The more volatile unemployment survey surprisingly
showed an increase of 308K jobs in February, indicating that smaller
companies were a source of job gains.
This
week's housing data was weaker than expected. January Pending Home Sales
fell 7.6%, far below the consensus forecast for a small increase. They were
still 12% higher than one year ago, however. The expected surge in sales
from the extended homebuyer tax credit has failed to materialize so far.
The chief economist of the National Association of Realtors (NAR) suggested
that unusually harsh weather "hampered shopping activity" in many
regions, so a pickup in sales still may be seen as buyers take advantage of
the tax credit before the April 30 deadline.
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Also Notable:
- The Fed's
Beige Book reported that the economy continued its slow growth
- As
expected, the European Central Bank (ECB) made no change in rates
- The
Treasury will auction $74 billion in 3-yr, 10-yr, and 30-yr
securities next week
- The Fed
purchased $10 billion in agency MBS, with about $34 billion more to
go
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Average
30 yr fixed rate:
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Last
week:
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-0.10%
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This
week:
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0.00%
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Stocks
(weekly):
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Dow:
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10,500
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+150
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NASDAQ:
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2,300
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+60
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Week
Ahead
The
Economic Calendar will be very light next week. The Trade Balance will be
released on Thursday. The big Retail Sales report will come out on Friday.
Retail Sales account for about 70% of economic activity. Consumer Sentiment
will also be released on Friday. In addition, there will be Treasury
auctions on Tuesday, Wednesday, and Thursday. There were strong reactions
to the last auctions for these securities.
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