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Retail Sales Disappoint
With the announcement at the beginning of the week of a Greek bailout deal, the focus returned to the economic data. The major retail sales and manufacturing data was weaker than expected, causing mortgage rates to end the week a little lower.
The Greek debt drama is not over, but its strong daily influence on global financial markets may be. After months of negotiations, Greece and its creditors have agreed to the framework of a badly needed bailout deal. Many steps remain, but the major hurdles have been overcome. The main issue remaining is whether the Greek government can successfully implement the unpopular reform measures required by creditors.
One of the best measures of U.S. economic activity is the monthly Retail Sales report.  After a large increase in May, continued improvement was forecast for June.  This did not happen. Instead of the expected increase of 0.5% from May, June retail sales, excluding volatile auto sales, declined slightly, and the figures from May were revised downward as well. Slower economic growth reduces inflationary pressures, which is favorable for mortgage rates.
Looking ahead, the only significant economic data next week will come from the housing sector. Existing Home Sales will be released on Wednesday and New Home Sales is scheduled for Friday. The next Fed meeting will take place on July 29.  In addition, investors will be watching to make sure there are no disruptions in the remaining steps in the Greek bailout deal.