MMG WEEKLY – WHAT ARE THEY SAYING THIS WEEK? | Mortgage Info By Michelle Wickett

Forecast for the Week After last week’s holiday-shortened week, there will be plenty of economic reports to watch for.

Pending Home Sales will be released on Monday and could have a relatively modest impact on trading.
Durable Orders will be delivered on Tuesday. This report gives a look at consumer spending for products that are expected to last at least three years.
Another important report will be Consumer Confidence on Tuesday, as the American consumer is a very important player in theU.S. economy.
In the manufacturing sector, the Chicago PMI and the ISM Index will be released on Wednesday and Thursday, respectively.
The all-important Gross Domestic Product report comes on Wednesday and will give a detailed view on the overall picture of growth in theU.S.
Weekly Initial Jobless Claims will be released on Thursday, and last week’s claims remained near four-year lows, signaling that the jobs market could be healing.
Finally, the Core Personal Consumption Expenditure (PCE) report will be released on Thursday. This is the Fed’s favorite gauge of inflation.

Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. The chart below shows Mortgage Backed Securities (MBS), which are the type of Bond that home loan rates are based on.

When you see these Bond prices moving higher, it means home loan rates are improving – and when they are moving lower, home loan rates are getting worse.

To go one step further – a red “candle” means that MBS worsened during the day, while a green “candle” means MBS improved during the day. Depending on how dramatic the changes were on any given day, this can cause rate changes throughout the day, as well as on the rate sheets we start with each morning.

As you can see in the chart below, roller coaster trading in the markets continues. I’ll continue to monitor this situation closely.

Chart: Fannie Mae 3.5% Mortgage Bond (Friday Feb 24, 2012)

The Mortgage Market Guide View

Economic Calendar for the Week of February 27 – March 02

Date	ET	Economic Report	For	Estimate	Actual	Prior	Impact
Mon. February 27	10:00	Pending Home Sales	Jan	1.0%	2.0%	-3.5%	Moderate
Tue. February 28	08:30	Durable Goods Orders	Jan	-1.4%		3.0%	Moderate
Tue. February 28	10:00	Consumer Confidence	Feb	62.5		61.1	Moderate
Wed. February 29	08:30	Gross Domestic Product (GDP)	Q4	2.8%		2.8%	Moderate
Wed. February 29	08:30	GDP Chain Deflator	Q4	0.4%		0.4%	Moderate
Wed. February 29	09:45	Chicago PMI	Feb	60.0		60.2	HIGH
Wed. February 29	02:00	Beige Book	Feb				Moderate
Thu. March 01	08:30	Personal Spending	Jan	0.3%		0.0%	Moderate
Thu. March 01	08:30	Personal Income	Jan	0.4%		0.5%	Moderate
Thu. March 01	08:30	Personal Consumption Expenditures and Core PCE	Jan	0.2%		0.2%	HIGH
Thu. March 01	08:30	Personal Consumption Expenditures and Core PCE	YOY	NA		1.8%	HIGH
Thu. March 01	08:30	Jobless Claims (Initial)	2/25	355K		351K	Moderate
Thu. March 01	10:00	ISM Index	Feb	54.5		54.1	HIGH

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