Daily Market Update 9/30/09

Rates were little changed Wednesday as second quarter GDP was revised higher to -0.7%, above the consensus forecast of -1.2%, but the Chicago PMI national manufacturing index fell to 46.1, which was far below the expected reading of 52.0. A reading below 50 indicates contraction in the manufacturing sector. Stocks moved sharply lower. No other economic data will be released today.

Daily Market Update 9/29/09

Mortgage rates held steady Tuesday on mixed economic news. The S&P/Case-Shiller home price index rose for the third straight month in July, while the year-over-year decline was less than expected. The Conference Board reported Consumer Confidence fell last month as job losses mounted. A small increase had been forecast. The remainder of the week may be volatile for mortgage-backed securities markets. The Chicago Purchasing Manager's Index will be released Wednesday, the Institute for Supply Management manufacturing index Thursday, and September's Non-farm Payrolls report Friday. No other economic data will be released today.

Daily Market Update 9/25/09

Mortgage rates inched lower Friday following the release of weaker than expected economic data. August Durable Goods Orders fell 2.4%, well below the consensus forecast of +0.5%. July New Home Sales rose 0.7% to 429,000, but fell short of expectations. The 30-year fixed rate is now at its lowest level since May. Federal Reserve Board of Governors member Kevin Warsh suggested in a Wall Street Journal Op Ed piece that the Fed may need to begin raising interest rates while unemployment is still elevated in order to avoid runaway inflation. Several key economic reports are due out next week, the most significant being Friday's Non-farm Payrolls report for September.

Daily Market Update 9/24/09

Mortgage rates eased Thursday following yesterday's FOMC meeting. The Fed announced plans to gradually reduce weekly purchases of mortgage-backed securities (MBS) from Fannie Mae and Freddie Mac, but extend the phase-out of the program by three months, until March 2010. MBS markets reacted favorably to the announcement. In economic news, weekly Jobless Claims fell to 530,000, less than forecast. Existing Home Sales declined 2.7% in August. A small increase had been expected. Stocks and oil prices moved lower. Durable Goods Orders for August will be released tomorrow.

Daily Market Update 9/23/09

Rates have seen little movement ahead of this afternoon's Fed announcement. No change in rates is expected, but the Fed may may release important details on the timing of future rate hikes and the status of the mortgage-backed securities (MBS) purchase program. The FOMC statement may have a large impact on MBS prices. There will be a 5-year Treasury auction at 1:00 PM. No economic data will be released today.

Daily Market Update 9/22/09

Rates inched higher Tuesday as this week's two day FOMC meeting got underway. The Fed will issue its policy statement tomorrow at 2:15 PM. In economic news, US Home Prices rose 0.3% in July according to the Federal Housing Finance Agency, a bit less than expected. The $8,000 first-time home buyer tax credit helped boost sales. Stocks moved modestly higher.

Daily Market Update 9/21/09

Mortgage rates were mostly unchanged Monday ahead of this week's FOMC meeting. The Fed will begin their two day meeting tomorrow. While no rate change is expected, investors disagree on how and when the Fed will wrap up its purchases of mortgage-backed securities from Fannie Mae and Freddie Mac. Their decision could have a large impact on mortgage rates. In economic news, Leading Indicators rose for the fifth straight month, but came in slightly below expectations. No other data will be released today.

Daily Market Update 9/18/09

Rates held steady Friday, as no economic data will be released today. This morning, the Federal Housing Administration (FHA) announced that its reserves have fallen below required levels. To reduce risk, the FHA is planning policy changes, such as requiring higher credit scores for borrowers. No time frame for the proposed changes has been given. Next week may be volatile for mortgage-backed securities (MBS) markets. Traders will be closely watching Wednesday's FOMC meeting for details of how and when the Fed plans to unwind its purchases of Treasuries and MBS's. The Fed has purchased nearly $1 trillion of MBS's from Fannie Mae and Freddie Mac this year in an effort to push mortgage rates lower.

Daily Market Update 9/17/09

Mortgage rates were little changed Thursday as Housing Starts rose at a 2% annual rate, close to forecast. Building Permits, a leading indicator, rose 3% to 579,000 units, the highest level since November. Weekly Jobless Claims came in close to expectations. No other economic data will be released today. Investors are turning their focus to next week's FOMC meeting of the Federal Reserve.

Daily Market Update 9/16/09

Rates improved slightly Wednesday as retail inflation data came in close to expectations. The August Consumer Price Index (CPI) rose 0.4% from July and fell 1.5% from one year ago. The closely watched "core" rate rose at a tame 1.4% annual rate. Separately, Industrial Production rose 0.8% from July. Mortgage-backed securities markets initially rose, but fell back after a Treasury report showed a substantial decline in foreign holdings of US securities. The Mortgage Bankers Association weekly purchase activity index fell by 10%, while the refinancing activity index decreased by 7%. No other data will be released today.

Daily Market Update 9/15/09

Mortgage rates moved higher Tuesday as stronger than expected economic data hurt mortgage-backed securities markets. The August Producer Price Index rose 1.7% from July, while the more closely watched "core" rate, which excludes food and energy components, rose 0.2%, doubling forecast. Retail Sales increased 2.7% in August, boosted by the Cash for Clunkers program. Analysts will be watching to see if the strength in retail sales continues in months ahead. The Empire State Index, which measures New York manufacturing activity, rose to 18.9, above the consensus of 15.0. The Consumer Price Index and Industrial Production will be released tomorrow.

Daily Market Update 9/14/09

Rates inched higher Monday ahead of key inflation data due out later this week. The Producer Price Index and Consumer Price Index will be released over the next two days. Global investors grew nervous over the prospect of an impending trade war after the Obama Administration announced tariffs on tires imported from China last Friday. China responded over the weekend, saying they will consider imposing tariffs on automotive products and chickens from the US. Stocks moved modestly lower. No economic data will be released today.

Daily Market Update 9/11/09

Mortgage rates inched lower Friday. The 30-year fixed Fannie Mae required net yield reached its lowest level since May 27. Consumer Sentiment rose more than forecast in August as job losses slowed. Several key economic reports are due out next week, including the Producer Price Index and Retail Sales on Tuesday, and the Consumer Price Index and Industrial Production Wednesday. No other economic data will be released today.

Daily Market Update 9/10/09

Rates moved lower Thursday as global bond markets improved when the Bank of England (BOE) did not increase its stimulus programs. As expected, the BOE held rates unchanged. Weekly Jobless Claims fell a bit more than expected to 550,000. The July Trade Deficit rose sharply, driven by new car sales under the Cash for Clunkers program. Freddie Mac reported average 30-year fixed mortgage rates for the past week of 5.07% with .7 points, down slightly from the previous week. The Treasury will wrap up its 3 day auction with the sale of 30-year bonds this afternoon at 1:00 PM. No more economic data will be released today.

Daily Market Update 9/9/09

Mortgage rates remained mostly unchanged Wednesday ahead of this afternoon's Treasury auction of 10-year notes. This morning, the US dollar dropped to its lowest level of the year. Stocks moved modestly higher. The Federal Reserve will release its Beige Book, a survey of economic activity by the Fed's 12 regional banks, at 2:00 PM. The Mortgage Bankers Association weekly purchase activity index rose by 10%, while the refinancing activity index increased by 23%, as 30-year fixed rates approached 5% last week. No economic data will be released today.

Daily Market Update 9/8/09

Rates inched higher Tuesday ahead of this week's large Treasury auctions of 3- and 10-year notes and 30-year bonds, scheduled for the next three days. It will be a light week for economic news. Stocks, oil, and gold prices all moved higher, the dollar lower. No economic data will be released today.

Daily Market Update 9/4/09

Mortgage rates held steady Friday following mixed jobs data for August. The Labor Department reported the U.S. economy lost 216,000 jobs last month, less than the consensus forecast of -230,000. However, payroll figures for the two previous months were revised down by 49,000, resulting in a jump in the Unemployment Rate to 9.7%, the highest level in 26 years. Stocks moved modestly higher. Next week the Treasury will auction $70 billion of 3-, 10-, and 30-year notes beginning Tuesday. The mortgage-backed securities market will close at 2:00 PM today for the Labor Day Holiday.

Daily Market Update 9/3/09

Rates were little changed Thursday as weekly Jobless Claims came in close to expectations. The Institute for Supply Management services index reported a reading of 48.4, slightly above forecast, but indicating the services sector of the economy remains in contraction. Stocks were mixed. Investors will be closely watching tomorrow's Non-farm Payrolls report for August.

Daily Market Update 9/2/09

Mortgage rates inched lower Wednesday as the 30-year fixed Fannie Mae required net yield fell to its lowest level since July 14. This morning, second quarter Productivity was revised higher to +6.6%, as manufacturers cut expenses. Unit labor costs fell 5.9%, the biggest decline in 9 years. Factory Orders rose 1.3%, below forecast. Minutes from last month's FOMC meeting will come out at 2:00 PM. No other economic data will be released today.

Daily Market Update 9/1/09

Rates held steady Tuesday as stronger than expected economic data was offset by concerns over rising bank losses. The Institute for Supply Management index showed manufacturing expanded for the first time in 19 months. Pending Home Sales increased 3.2% in July, led by low interest rates, distressed sales, and tax incentives for buyers. Construction Spending fell 0.2%, in line with forecast. Stocks fell sharply on growing concerns over bank failures. Last week the FDIC raised its list of problem banks to 416, from 305 three months earlier. Total assets of the banks on the list was nearly $300 billion, while the fund to insure deposits fell to $10.4 billion. The FDIC may soon need to borrow from the Treasury to repay bank depositors. Minutes from last month's FOMC meeting of the Fed will be released tomorrow.