Monday Real Estate & Mortgage Market Update & Calendar

Bond and mortgage markets opened weaker this morning ahead of the March employment report on Friday. The 10 yr Treasury Note remains in its well-defined trading range that has held it now since last January with only a few exceptions when the note ventured out; 30 yr MBSs have the same chart pattern, trading in a 100 point range with a few exceptions. The only economic report this morning came at 9:45; the March regional Chicago purchasing managers’ index was released, the forecasts were for the index at 59.0 from 59.8 in Feb. As reported, the index fell to the weakest since August 2013 at 55.9.

Europe facing a dilemma; similar to the US the level of inflation in the EU is slowing. Inflation is the slowest pace since November 2009, signaling that companies are struggling to raise prices amid feeble demand. The ECB aims to return inflation to just under 2 percent. Inflation in the 18-nation euro area slowed to 0.5% this month, according to an initial estimate by the European Union’s statistics office. Both the US Fed and the ECB want inflation to increase to speed spending and profits that in turn will increase employment, both banks are trying with no success as the global economies suffer the worst rebound from a recession since before the Big War. The ECB will meet on Thursday.

Janet Yellen is speaking now at a conference in Chicago, nothing new likely will occur. So far not much on the wires. So far she is continuing to remind that the employment condition isn’t as good as it looks as job creations are not the good jobs that the Fed wants to see.

Today, the last day of the quarter; at times the last day sets up increased volatility but so far not much. 

Not a lot of market-driving news today. Between now and Friday’s March employment data there are a number of key economic measurements. The ISM manufacturing index and the ISM service sector index, March auto and truck sales, and Feb factory orders al out before Friday morning.

This Week’s Economic Calendar:
       Today,
           9:45 am Chicago Purchasing Mgrs. index (59.0) as reported
       Tuesday,
           10:00 am ISM March manufacturing index (54.0 from 53.2)
                          Feb construction spending (+0.1%)
           No time March auto and truck sales (15.8 mil)
      Wednesday,
          7:00 am weekly MBA mortgage applications
          8:15 am ADP private jobs (+193K)
         10:00 am Feb factory orders (+1.2%, Jan -0.7%)
     Thursday,
        8:30 am weekly jobless claims (+9K to 320K)
                      Feb trade deficit (-$38.8B)
        10:00 am March ISM services sector index (53.3 from 51.6)
     Friday,
        8:30 am March employment data (unemployment rate 6.6%, Feb 6.7%, non-farm jobs +206K, private jobs +215K, hourly earnings +0.2%, work week 34.4 hrs., up from 34.2 hrs. in Feb)

The outlook is still that there is more pressure for rates to increase than decrease so I am continuing to advise my clients to lock your interest rate unless you need more time. Stay focused as this week should be a rough one.