Incline Village Mortgage Rates, Incline Village Mortgage Loan Rates, Incline Village Mortgage Loans, Incline Village Home Loans, and Incline Village Home Loan Rates:
Friday – September 13 2013, 9:32am ET
Current Trend Direction: Sideways
Advise Your Clients: Start day Carefully Floating
Current Price of FNMA 4.0% Bond: $102.53, +9bp
Bonds are slightly higher in response to mixed economic data. Prices remain in a sideways trading pattern beneath resistance headed into next week’s big risk event, the Fed Meeting and Monetary Policy Statement on Wednesday.
Inflation at the wholesale level as measured by the Producer Price Index (PPI) rose by 0.3% in August versus the 0.2% expected and up from the 0.2% registered in July. The Core PPI, which strips out volatile food and energy, was unchanged and down from the 0.1% expected. Inflation is non-existent at the moment and that must be a concern for the Fed as they consider tapering QE3.
Over in consumer news, the Commerce Department reported that Retail Sales in August rose by 0.2%, below the 0.4% increase expected to the lowest reading since April. When stripping out autos, sales were up just 0.1% and below the 0.3% estimated. Retail Sales account for about 1/3 of consumer spending, which is one of the main drivers of economic growth. This was not a good number. But one reading doesn’t make a trend. We will see what upcoming months show.
At 10:00am ET, Consumer Sentiment for early September will be released and the news could confirm the missed Retail Sales number.
A report surfaced this morning that President Obama was set to announce that Larry Summers would be the next Fed Chairman when Mr. Bernanke steps down in January. The Whitehouse said the rumor wasn’t true and the President has not yet made a decision. Current Fed Vice Chairman Janet Yellen is also in the run for the seat.
As mentioned previously, the 4% coupon is trading in a sideways pattern just below resistance at the 25-day Moving Average and traders will most likely not add on any big positions before Wednesday’s Fed statement. We will continue to recommend a Floating bias into the weekend with hopes to float all the way into the Fed Statement…if the market will allow us to do so.