|
|
Greek Negotiations Remain Uncertain
With
little US economic news this week, investors focused most of their
attention on Europe, where Greece is attempting to avoid a debt default. A
lack of progress in Greece late in the week caused a minor flight to
safety, and mortgage rates ended slightly lower than last week.
For most
of the week, it appeared that Greek officials were on track to deliver a
package of austerity measures required for Greece to receive additional
aid. The negotiations took an unexpected step backward on Friday, however,
as Greek political leaders agreed on an austerity package on Thursday, but
European Union (EU) officials stated that Greece will not receive
additional aid until the Greek Parliament passes the package. Given the
resistance among the Greek people, this is not a sure thing, and it extends
the uncertainty about whether Greece will be able to avoid a debt default.
As a result, investors shifted to relatively safer assets, including US
mortgage-backed securities (MBS), which helped mortgage rates and hurt
stocks.
In a
light week for US economic data, the Jobless Claims report stood out.
Weekly Jobless Claims unexpectedly dropped to 358K. Following several years
of readings consistently above 400K, weekly claims have been mostly under
400K over the last couple of months. In the past, readings in this range
have been consistent with an improving labor market. In January, the
Unemployment Rate dropped to the lowest level since February 2009, and the
recent Jobless Claims reports provide additional evidence that the labor
market is moving in the right direction.
|
|
|
|
Also Notable:
- The four-week
average of Jobless Claims fell to the lowest level since April 2008
- The US Trade
Deficit increased to a six-month high
- The Dow stock
index climbed to multi-year highs
- The European
Central Bank (ECB) made no change in rates
|
|
|
|
|
|
|
|
|
|
Average 30 yr fixed
rate:
|
|
Last week:
|
+0.02%
|
|
|
This week:
|
-0.01%
|
|
|
|
Stocks (weekly):
|
|
Dow:
|
12,750
|
-100
|
|
NASDAQ:
|
2,900
|
-25
|
|
|
|
Week
Ahead
The most
significant economic data next week will be the monthly inflation reports. The
Producer Price Index (PPI) focuses on the increase in prices of
"intermediate" goods used by companies to produce finished
products and will come out on Thursday. The Consumer Price Index (CPI), the
most closely watched monthly inflation report, will come out on Friday. CPI
looks at the price change for those finished goods which are sold to
consumers. In addition, Retail Sales will be released on Tuesday. Retail
Sales account for about 70% of economic activity. Industrial Production,
another important indicator of economic growth, will come out on Wednesday,
along with the detailed FOMC Minutes from the January 25 Fed meeting.
Housing Starts will be released on Thursday. Import Prices, Philly Fed and
Empire State will round out the schedule.
|
|
To learn more about news impacting interest rates and mortgage markets,
give me a call
|
|
Comments
Post a Comment