Last week saw some strong ecomomic data released in the U.S. However, the 10 Year Treasury Bond Yield still dropped (mortgate rates dropped) towards the end of the week due to market worries over anticipated credit rating cuts in the European Union. The European turmoil leads to the financial markets wanting less riskier assets (US Treasuries/Mortgages), hence the drop in yields/rates.

Today, the 10 Year Bond yield rose slightly (slightly higher mortgage rates) due to higher than expected data from the Empire Manufacturing Index and speculation that Chinese government will try to stimulate growth in their economy (all beneficial market news).

Market Data this week:
Tuesday, January 17th - Empire Manufacturing Index
Wednesday, January 18th - PPI (Inflation Index - Wholesale Level)
Thursday, January 19th - CPI (Inflation Index - Consumer Level), Weekly Jobless Claims, Housing Starts (Construction of new homes)
Friday, January 20th - Existing Home Sales

By Stephen Casil, Lyons Mortgage Services Inc.