Weekly Market Commentary: Mortgage bond prices finished the week slightly higher which pushed rates a little lower. Rates started the week on a good note tied to stock weakness. There was an MBS selloff heading into the Fed release Wednesday afternoon as traders remained cautious. The Committee noted they “will likely reduce the pace of asset purchases in further measured steps at future meetings.” However, they also indicated asset purchases are not on a preset course. MBS prices rallied that afternoon which provided most of the improvements for the week. Higher than expected weekly jobless claims Thursday morning were rate friendly. However, new home sales came in at 433k versus the expected 420k which didn’t help rates Friday. Mortgage interest rates fell by about 1/8 a discount point for the trading week despite the continued volatility. Gross Domestic Product The Gross Domestic Product (GDP) is one the most important reports during any given quarter. GDP is a measure of US economic output and spending. The report is significant in that it provides investors, analysts, traders, and economists with a comprehensive report of the direction of the economy. In addition, it also influences the decisions of Federal Reserve policy makers, Congressional budget employees, and corporate financial planners. GDP is the sum total of goods and services produced by the United States. The initial report is often based on incomplete data. Therefore, additional revisions are released over the following two months. Be cautious heading into the GDP release in the event the data comes in against us.
Posted on: Fri, 23 May 2014 18:24:39 +0000
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