Interest Rates Improve on Weak Economic Datapremier mortgage group | Friday, July 6th, 2012 | Comments Off
Mortgage interest rates improved again this week on weak economic news, touching new record lows. Construction Spending was a bright spot in the week, beating expectations with 0.9% increase, a sign of the improving housing market. Jobless claims and job creation figures were both within range of expectations, and did not affect our national 8.2% unemployment rate. Also meeting expectations were Motor Vehicle Sales. However ISM Manufacturing data was much weaker than expected, from 53.5 to 49.7 over a month, led by a drop in new orders and prices of raw materials. The big news this week came out of Europe, as we are becoming accustomed to, but was not related to the ongoing debt crisis. Instead the story says the Libor (London Inter-Bank Offered Rate) has been implicated in a scandal, where from 2005 to 2010 the survey respondents (from whom the rate is derived) appear to have artificially kept the rate low. The Libor is the index used for a wide variety of variable-rate debt products, and the effect of this manipulation has yet to be fully understood.
The Dow Jones Industrial Average is currently at 12,772, down about 30 points on the week. Crude oil spot prices are currently just over $84 per barrel, up almost $6 per barrel on the week. The Dollar strengthened versus the Euro and the Yen on the week.
Next week look toward International Trade and FOMC Meeting Minutes on Wednesday, Jobless Claims on Thursday, and the Producer Price Index on Friday.