Mortgage Rate Update



This Week; markets will focus on Friday's August employment report as the main event for the week. In the meantime there are key economic data points everyday; July personal income and spending on Monday, consumer confidence on Tuesday, Wednesday has the market-rattling ADP August private jobs estimate and the Chicago purchasing mgrs index, Thursday weekly jobless claims and the August ISM manufacturing index. Last week Bernanke didn't offer up more stimulus but said the Fed has a lot of tools in its box if needed. He once again reminded that increasing employment required more fiscal stimulus from politicians. He said the world’s biggest economy is gradually recovering, the stock market rallied on that view and the bond market also was a little better on Friday. Monday the US stock market will open better; stock markets around the world rallied Monday on Bernanke's view of US recovery.

The US bond and mortgage markets are likely to trade in a sideway pattern through the week. As long as markets believe there will not be another economic decline into recession the bellwether 10 yr note will not likely break below 2.00% and mortgage rates will likely stay about where we have them currently. This week's range for the 10 yr note and mortgage rates should be confined to 15 to 20 basis points in rates.