Daily Market Update 8/31/09

Rates were little changed Monday as investors showed little reaction to a better-than-expected Chicago Purchasing Managers Index. The Chicago PMI national manufacturing index came in at 50.0, the dividing line between contraction and expansion. This may be a volatile week for mortgage-backed securities (MBS), with tomorrow's release of the Institute for Supply Management manufacturing index, Wednesday's release of the minutes from last month's Federal Open Market Committee meeting, and Friday's Non-farm Payrolls report for August. Any reaction to Friday's employment data will be exaggerated due to an early market closing and light trading ahead of the Labor Day weekend. No other data will be released today.

Daily Market Update 8/27/09

Mortgage rates remained little changed Thursday as today's economic data came in close to expectations. Weekly Jobless Claims came in at 570,000, while the 4-week moving average fell slightly to 566,000. Second quarter GDP was unchanged from last month's estimate of -1.0%, beating forecast. Stocks moved lower after the FDIC added 111 lenders to its list of "problem banks", pushing the total to 416, a 15-year high. Oil prices dipped below $70 per barrel on increased inventories. The Treasury will hold an auction of 7-year notes this afternoon at 1:00 PM.

Daily Market Update 8/26/09

Mortgage rates were little changed Wednesday. July Durable Goods Orders rose 4.9%, higher than the consensus forecast of 3.2%, however the most closely watched components fell slightly. New Home Sales surged 9.6% in July to the highest level in 10 months, providing further evidence the housing market has begun to stabilize. There will be a 5-year Treasury auction at 1:00 PM.

Daily Market Update 8/24/09

Mortgage rates were little changed Tuesday following this morning's announcement that the Obama Administration will reappoint Ben Bernanke to a second term as Chairman of the Federal Reserve. The White House also increased its estimated budget deficit for the next ten years to $9.05 trillion, roughly $2 trillion more than estimates earlier this year, and in line with projected figures from the Congressional Budget Office. In economic news, the Case-Shiller Home Price Index rose 3% in the second quarter from the first quarter, the first increase in three years. Consumer Confidence rose for the first time in three months, beating forecast. The Treasury will hold an auction of 2-year notes this afternoon.

Daily Market Update 8/24/09

Rates held steady Monday after having risen late Friday. Stronger than expected Existing Home Sales and a relatively upbeat assessment of the economy by Fed Chairman Ben Bernanke pushed stock prices higher and hurt mortgage-backed securities prices last week. No economic data will be released today. The Treasury will begin a large three-day auction tomorrow.

Daily Market Update 8/21/09

Mortgage rates came under upward pressure Friday following a National Association of Realtors report showing July Existing Home Sales rose 7.2%, far above forecast. The annual pace of 5.24 million units was the highest level since August 2007. The housing market has been boosted by sales of foreclosed properties, historically low interest rates, and the $8,000 first-time homebuyer tax credit. Stocks surged, hurting mortgage-backed securities markets. Key economic data due out next week include Durable Goods Orders on Wednesday and revised second quarter GDP figures Thursday. The Treasury will hold record auctions of 2-, 5-, and 7-year notes beginning Tuesday.

Daily Market Update 8/20/09

Mortgage rates held steady Thursday following the release of mixed economic data. Weekly Jobless Claims rose unexpectedly to 576,000, above the consensus forecast of 550,000. Leading indicators rose 0.6%, close to expectations. The Philly Fed index, which measures manufacturing growth in the Philadelphia region, showed expansion for the first time this year. Most analysts had anticipated a decline. The Treasury will announce its funding needs for the next two quarters at 11:00 AM. Investors will be watching closely, as an increased supply of debt may pressure interest rates.

Daily Market Update 8/19/09

Rates inched lower Wednesday as weakness in global stock markets helped mortgage-backed securities markets. No economic data will be released today.

Daily Market Update 8/18/09

Rates were little changed Tuesday. The July Producer Price Index showed a decline of 0.9% from June, and 6.8% year-over-year, indicating that inflation is not a concern in the short term. Housing Starts fell unexpectedly, led by a decline in multi-family units. Building Permits, a leading indicator, fell short of consensus forecast. Stocks moved modestly higher. No other economic data will be released today.

Daily Market Update 8/17/09

Rates moved slightly lower Monday as mortgage-backed securities benefited from a sharp decline in the stock market. The 30-year fixed Fannie Mae required net yield is now at its lowest level since July 14. In economic news, the Empire State regional manufacturing index rose well above consensus forecast. Oil prices fell below $65 per barrel, the dollar moved higher. The July Producer Price Index will be released tomorrow. On Thursday the Treasury will announce its funding needs for the next two quarters. No other data will be released today.

Daily Market Update 8/14/09

Mortgage rates inched lower Friday and have now fallen nearly 3/8% in the past week. The Consumer Price Index (CPI) registered no change from the previous month, in line with expectations. The CPI fell 2.1% year-over-year, the largest annual decrease since 1950. The Producer Price Index will be released next Tuesday. Consumer Sentiment declined last month to its lowest level since March. An increase had been expected. Industrial Production rose 0.5%, beating forecast. No other economic data will be released today.

Daily Market Update 8/13/09

Mortgage rates held steady Thursday following weaker than expected economic data. July Retail Sales fell 0.1%, an increase of 0.7% had been forecast. Weekly Jobless Claims rose to 558,000. Yesterday, the Federal Reserve left interest rates unchanged and suggested that economic activity is leveling out, rather than continuing to decline. Also, the Fed has decided to gradually reduce the size of its Treasury purchases beginning August 19 and will conclude the purchases by the end of October. The Fed expects inflation will remain subdued, and that interest rates will remain at low levels for "an extended period".

Daily Market Update 8/12/09

Rates were little changed Wednesday ahead of this afternoon's Treasury auction and Fed comments. The second leg of a three day Treasury auction takes place at 1:00 PM et. The Federal Open Market Committee (FOMC) of the Fed ends their two day meeting at 2:15 PM. No rate change is expected but investors will be closely watching the FOMC's accompanying statement regarding the state of the economy. This morning, Trade Balance figures came in close to expectations and second quarter Existing Home Sales rose 3.8% from the first quarter. Median prices fell 15.6% from the same period in 2008. No other economic data will be released today.

Daily Market Update 8/11/09

Mortgage rates eased Tuesday as mortgage-backed securities extended yesterday's rally. In economic news, second quarter Productivity increased 6.4%, well above forecast. Many companies have scaled back employees as much as possible in the current downturn, and productivity gains appear to reflected this. Stocks moved lower. Attention will now turn to this afternoon's Treasury auction at 1:00 PM et.

Daily Market Update 8/10/09

Mortgage rates inched lower Monday after having risen about 3/8% last week. No economic data is due out today, but the remainder of the week will be busy. The Fed's FOMC meeting wraps up Wednesday, and while no rate changes are expected, investors will be watching closely for details on when the Fed plans to end its purchase of US Treasurys. Rates may remain volatile throughout the week.

Daily Market Update 8/7/09

Rates moved sharply higher Friday following the release of stronger than expected jobs data. The economy lost 247,000 jobs in July, against a consensus forecast of -300,000. The Unemployment Rate fell to 9.4% from 9.5% in June. Analysts had been expecting an increase to 9.6%. In addition, Average Hourly Earnings rose more than expected. Stock markets rallied, further pressuring Treasurys and mortgage-backed securities. Volatility will likely continue into next week with large Treasury auctions Tuesday, Wednesday, and Thursday, the August FOMC meeting of the Fed on Wednesday, July Retail Sales figures Thursday, and the Consumer Price Index Friday. No other economic data will be released today.

Daily Market Update 8/6/09

Mortgage rates moved higher as weekly Jobless Claims fell by 38,000, far more than expected, to 550,000. The mortgage-backed securities market has been extremely volatile for the past two days ahead of tomorrow's Nonfarm Payrolls report for July. No other economic data will be released today.

Daily Market Update 8/4/09

Rates were little changed Tuesday following reports on June Personal Income and Pending Home Sales. Personal Income fell 1.3%, a bit more than expected, but Pending Home Sales rose 3.6%, easily beating forecast. Stocks were mixed. Investors will now begin turning their attention to Friday's release of Nonfarm Payrolls figures for July. Economists are expecting the report to show a net loss of 300,000 jobs for the month and an increase of .1% in the Unemployment Rate to 9.6%.

Daily Market Update 8/3/09

Rates moved higher Monday following the release of stronger than expected economic data. The Institute for Supply Management (ISM) reported July manufacturing shrank less than forecast, with an ISM index reading of 48.9, the highest level in 11 months. Separately, Construction Spending rose 0.3%. A decline of 0.5% was expected. Stocks and oil prices moved higher. Ford reported July sales increased 2.3% over June, the first month-over-month increase since 2007. The government "cash for clunkers" program was credited with the increase. No other economic data will be released today.