Mortgage rates are set to open lower in 2016, with stock markets selling off around the world, creating demand for the safe-half of U.S. Treasuries and other fixed income assets. The drop in global stocks overnight was triggered by slowing manufacturing in China, with trading in Chinese markets actually halted after dropping 7% on the first trading day of the year.
The final trading week for 2015 was relatively uneventful, with worse than expected jobless claims, helping support lower rates into the early-close on New Year’s Eve. The week ahead should see much more activity with China now back in the spotlight, as well as several key economic releases in the U.S. that will give market participants plenty to digest. The releases for the week will include important numbers such as Durable Goods Orders, ISM Manufacturing, and Factory Orders as well as two very important releases in the FOMC minutes and Non-Farm Payrolls. While the economic numbers in the U.S. will be key, the turmoil in equity markets across the world could very well trump any major misses in the data. When the Fed delayed liftoff from September to December, “international developments” were cited as the reason for the delay, and estimates for when the Fed will increase rates again could very well be pushed back, with continued global turmoil.
Economic Calendar for the week of 01/04/2016 to 01/08/2016
Monday: ISM Manufacturing and Construction Spending.
Wednesday: ADP Employment Change, Factory Orders, Durable Goods Orders, ISM Non-Manufacturing, and the FOMC minutes from the December meeting.
Thursday: Jobless Claims
Friday: Non-Farm Payrolls and Wholesale Inventories.
Key Market Indicators
By: Michael Borodinsky
Vice President/Regional Builder Branch Manager | Caliber Home Loans
Call Michael: 732-382-2654
Email Michael: Michael.Borodinsky@caliberhomeloans.com
Follow Michael on Twitter: @mikeborodinsky