Information from www.scherbergroup.com
As we head into the week before the Christmas holiday, several economic reports are ready and waiting to be unwrapped a little early. Tuesday will bring a look at the housing market via Housing Starts and Building Permits; Thursday holds a final reading on third quarter GDP and the Philadelphia Fed Manufacturing report; but the biggest package of all will arrive on Friday morning, the Personal Income and Spending report with its imbedded read on Core Inflation with the Personal Consumption Expenditure index — which also happens to be the Fed's favorite measure of inflation.
As you can see in the chart below, Bonds are presently dancing on a nice floor of support at the 50-day Moving Average — and if it holds during the coming week, this will help home loan rates stay stable, and perhaps improve. But if the news of the week has the scent of inflation, Bond prices could fall lower below the floor of support, which would cause home loan rates to rise.
