Mortgage rates improved throughout most of the week as the U.S. government suspended their non-essential operations as of Tuesday for the first time in seventeen years, following failure to reach a budget agreement on Capitol Hill. While the Democrat-driven Senate proposed a short-term “clean” spending bill that did not alter Obama’s Affordable Care Act, House Republicans refused to pass the bill and maintained their stance to defund Obamacare, resulting in a government shutdown. President Obama claimed to CNBC that there may be a faction that is willing to default on U.S. obligations, hinting that Republicans are using his health care plan as extortion to avoid U.S. technical default. Concern began to escalate over potential consequences of hitting the debt ceiling and possibly defaulting on U.S. obligations in the next few weeks, as the U.S. Treasury stated that a technical default could result in a “catastrophic” financial crisis worse than that of 2008. The U.S. manufacturing outlook improved this week, alongside of better-than-expected releases from ISM Manufacturing, the Chicago Purchasing Managers index, and the Dallas Manufacturing Activity report. While this week’s main economic releases of Non-Farm Payrolls and Unemployment were absent due to government shutdown, more weight was given to the ADP employment and Initial Jobless Claims releases. ADP employment of 166,000 new jobs was worse than its 180,000 estimate, while Initial Jobless Claims of 308,000 was better than its 315,000 estimate, remaining below their 350,000 benchmark for an improving employment outlook. While Fed-policy tapering debates continue, government shutdown and possible technical default remain center stage for market focus heading into next week. caliberhomeloans
Posted on: Fri, 04 Oct 2013 19:27:12 +0000
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