World and Economic News Affects

Investors are going to be under stress during the first three days of the week as the Treasury Department dumps a whopping $101 billion worth of supply into a market place already suffering a major case of indigestion. Add North Korea's repeated nuclear tests over the weekend and yesterday is adding confusion to the markets.

Case-Shiller reports this morning a 19.1 percent drop in HPA (home-price appreciation) in March. This is an all-time record pointing that we are not out of the housing decline woods yet. Because of this, I'll focus this post primarily on the mortgage markets.

Economic Calendar

Release Date & Time
Economic Indicator
Consensus Estimate
My Analysis


Tue. May 26, before the end of the day
The Fed will be buying inflation-indexed Treasury obligations maturing between 2010 and 2032. This event will probably have little influence on the trend trajectory of mortgage interest rates this trading session.

Tue. May 26, 10:00 a.m. ET
May Consumer Confidence
42.3 vs. last 39.2
The expected modest increase in this month’s measure of consumer confidence will probably not have much of an impact on the direction of mortgage interest rates today.


Tue. May 26, 1:00 p.m. ET
Treasury auctions $40 billion of 2-year notes
The yield on these securities is below 1.0% so investors are unlikely to push them lower. If my assessment proves accurate, this event will likely put some slight upward pressure on mortgage interest rates for the balance of the afternoon.

Wed. May 27, before the end of the day
The Fed will be in the credit markets looking to buy an unspecified amount of conventional Treasury debt maturing from 2012 to 2013. If the Fed leaves a large number of sellers standing around with unfilled orders this event will tend to put upward pressure on mortgage rates. A strong buying appetite by the Fed will likely do little more than support steady trading action in the mortgage market.


Wed. May 27, 8:30 a.m. ET
April Existing Home Sales
Up 2.0%
The pace of decline for existing home sales continues to soften – suggesting to some analysts that the housing sector may be within months of reaching a meaningful bottom. Affordability at its best levels in more than 17-years and 30-year mortgage rates within a whisper of their March record lows likely contributed to a solid gain in sales last month. If so, look for mortgage interest rates to struggle in any effort to move higher today.

Wed. May 27, 1:00 p.m. ET
Treasury auctions $35 billion of
5-year notes
The yield on these securities (above 2.0%) is probably high enough to draw solid demand from investors. If so, look for this event to be supportive of steady mortgage interest rates.


Thurs. May 28, 8:30 a.m. ET
Initial jobless claims for the week ended 5/23
Up 4,000
The number of people filing first-time claims for jobless benefits is expected to post a very small increase. Look for this data to have little, if any meaningful impact on the market today.

Thurs. May 28, 8:30 a.m. ET
Apr. Durable Goods Orders
Ex. Auto
+0.4% vs. last -0.8%
-0.3% vs. last -0.7%
These figures will likely draw little more than a passing glance from market participants.


Thurs. May 28, 1:00 p.m. ET
Treasury auctions $26 billion of
7-year notes
The yield on these securities (above 2.9%) is probably high enough to draw solid demand from investors and should therefore prove supportive of at least steady mortgage interest rates. In the unlikely event the results from this auction are weaker-than-expected – look for mortgage interest rates to edge higher.

Fri. May 29, 8:30 a.m. ET
Revised Q1 GDP
-5.5% vs. last -6.6%
This revised estimate of overall economic activity is expected to show some slight improvement – an event that is already priced into the mortgage market. If the revised GDP were to post a reading of -5.0% or better (a possible but not very probable outcome) it will probably spawn a rally in the stock markets at the expense of fractionally higher mortgage interest rates.