Market Analysis

The mortgage-backed securities market deteriorated yesterday but has recovered what it lost today.  As such rate sheets continue to be flat.

In economic news, the biggest news this morning was out of Germany, which posted is best improvement in GDP growth in 20 years.  The devaluation of the Euro which occurred earlier this year as the European debt crisis mounted has accomplished what may have been a primary objective for European leaders who seemed to be doing little to stem investor fears.  It is possible they wanted a weaker currency so that exports and tourism could rise.  In US news, July Retail Sales were up .4% vs expectations of a .5% increase.  Excluding the auto component, Retail Sales were up .2% which matched expectations.  The July Consumer Price Index (CPI) came in up .3% which was higher than the .2% expected.  Excluding food and energy, the Core CPI was up .1% which matched expectations.  The initial August University of Michigan Consumer Sentiment index came in at 69.6 which almost matched expectations for a 70.0 reading.  June Business Inventories were up .3% which was higher than the .2% expected.