Wednesday, July 06, 2022
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Market Commentary

Updated on July 6, 2022 10:05:46 AM EDT

There is no relevant economic data set for release this morning, but we will get the June 14-15th FOMC minutes at 2:00 PM ET. There is a possibility of the markets reacting to them, but I dont believe they will reveal a significant surprise that we did not get from the post-meeting statement, revised economic projections and press conference last month. Bond traders are looking for feelings about inflation and the size and frequency of planned rate hikes to control it. If there is a reaction, it will come during mid-afternoon hours.

Tomorrow has two economic reports set for release, starting with Junes ADP Employment report at 8:15 AM ET instead of the normal Wednesday release day. It has the potential to cause some movement in the markets if it shows much stronger or weaker numbers. This report predicts changes in private-sector jobs, using the companys clients that use them for payroll processing as a base. While it does draw attention, it is my opinion that it is overrated and is not a true reflection of the broader employment picture. It also is not accurate in predicting results of the monthly government report that follows a couple days later. Still, because we sometimes see a noticeable reaction to the report, it is on this weeks calendar. It is expected to show approximately 200,000 private sector jobs were added during the month. Bond traders would prefer to see a much smaller increase.

The weekly unemployment update is expected to reveal 234,000 new claims for unemployment benefits were filed last week, up from the previous week’s 231,000. Rising claims is a sign of employment sector weakness, meaning the higher the number tomorrow, the better the news it is for rates. It is worth reminding that this is only a weekly snapshot and does not carry the importance that many of the monthly reports do. In other words, it will take a noticeable variance from forecasts to directly influence mortgage rates. Plus, the markets will be much more focused on Friday’s monthly Employment report.

 ©Mortgage Commentary 2022

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Discount Mortgage
Office (888)360-3337 | Cell (408)316-5454
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Discount Mortgage
Office (888)360-3337 | Cell (408)316-5454
Real Estate Broker, California Department of Real Estate 9162270931
Bkr. Lic #01098186 [SIC code=6162 DUN #93-794-6796] NMLS# 314249