Daily Market Update 3/31/10

Mortgage rates held steady Wednesday on mixed economic data. The Chicago Purchasing Managers Index declined more than expected to 58.8 from 62.6 last month. Meanwhile, Factory Orders increased 0.6% in February, beating forecast. The Mortgage Bankers Association weekly purchase activity index rose 6.8%, while the refinancing activity index fell 1.3%. No other data will be released today.

Daily Market Update 3/30/10

Mortgage rates inched higher Tuesday as the yield spread between mortgage-backed securities (MBS) and Treasuries increased. The Fed will end its $1.25 trillion MBS purchase program tomorrow, which has been credited with holding mortgage rates down for the past 16 months. In economic news, the Conference Board reported Consumer Confidence rose to 52.5 in March from 46.4 in February, beating expectations. Stock moved higher. No other data will be released today.

Daily Market Update 3/29/10

Mortgage rates were little changed Monday. February Personal Income was flat from January, which was slightly below forecast. The February Core PCE price index also was unchanged, and increased at a tame 1.3% annual rate, indicating inflation is not a concern in the near term. Consumer Spending rose 0.3%, matching expectations. No other data will be released today.

Daily Market Update 3/26/10

Rates were little changed Friday. Mortgage-backed securities (MBS) came under pressure this week following three consecutive days of poor auction results for US Treasuries, beginning Tuesday. This morning, former Federal Reserve Chairman Alan Greenspan called the recent rise in Treasury yields a "canary in the mine", saying investors are concerned about "this huge overhang of federal debt which we have never seen before". In economic news, fourth Quarter GDP was revised down to +5.6%, a bit below expectations. Consumer Sentiment was unchanged in March. Stocks moved higher. Next week will be extremely busy in terms of key economic data. Core PCE, the Fed's preferred measure of inflation, will be released Monday, the Chicago Purchasing Managers Index will come out Tuesday, the Institute for Supply Management manufacturing index on Thursday, and the closely-watched Non-farm Payrolls report for March will be released Friday. MBS markets may be unusually volatile. No other data will be released today.

Daily Market Update 3/25/10

Rates moved higher yesterday afternoon, triggered by poor Treasury auction results, and have now risen by about 1/4% for the week. The sharp sell-off in mortgage-backed securities (MBS) reflects global concerns for bonds, in general, on the downgrading of Portuguese debt. Buyers are also demanding higher yields as the Fed ends their MBS purchase program next week. Fed Chairman Ben Bernanke speaks today about the Fed's exit strategy from the MBS purchase program. Investors will be closely watching today's Treasury auction of 7-year notes. In economic news, weekly Jobless Claims fell to 442,000, below the consensus forecast of 450,000.

Daily Market Update 3/24/10

Rates moved higher Wednesday ahead of this afternoon's record-tying $42 billion Treasury auction of 5-year notes. In economic news, Durable Goods Orders rose 0.5% in February, close to forecast. Outside of the auto sector, strength was seen in most areas, hurting mortgage-backed securities. Stocks were mostly lower, the dollar higher. No other data will be released today.

Daily Market Update 3/23/10

Mortgage rates inched lower Tuesday as Existing Home Sales declined for the third straight month in February. In testimony before the House Financial Services Committee, Treasury Secretary Timothy Geithner called for an overhaul of the housing finance system. Congress is considering what to do about Fannie Mae and Freddie Mac in response to the taxpayer bailouts of the two agencies. "Private gains can no longer be supported by the umbrella of public protection, capital standards must be higher and excessive risk-taking must be appropriately restrained" said Geithner. No other economic data will be released today. The Treasury will announce the results of its auction of 2-year notes at 1:00 PM.

Daily Market Update 3/22/10

Rates were little changed Monday in quiet trading. Results of large Treasury auctions scheduled for Tuesday, Wednesday, and Thursday may have the greatest impact on mortgage-backed securities this week. Revised first quarter GDP, the broadest measure of economic activity, will come out Friday. No data will be released today.

Daily Market Update 3/19/10

Rates inched higher Friday in light trading. Investors may be squaring their positions ahead of the scheduled end of the Fed's mortgage-backed securities purchase program March 31. No economic data will be released today. Next week will be extremely light in terms of new data. Existing Home Sales will come out on Tuesday, New Home Sales and Durable Goods Orders on Wednesday. Financial markets may be influenced more by political issues, such as health care and financial regulatory reform, in the coming days.

Daily Market Update 3/18/10

Rates held steady Thursday as the February Consumer Price Index (CPI) was unchanged from January, below the consensus forecast of +0.1%. Core CPI rose 0.1%, and increased at a low 1.3% annual rate, showing that core inflation remains in check for the time being. Leading Indicators rose 0.1%, in line with expectations. Weekly Jobless Claims came in at 457,000, slightly above forecast. No other data will be released today.

Daily Market Update 3/17/10

Mortgage rates inched lower Wednesday morning. Yesterday the Fed left rates unchanged and offered no surprises, saying that "economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels of the federal funds rate for an extended period." In economic news, the February Producer Price Index (PPI) declined -0.6%, below expectations. The more closely-watched "Core PPI", which excludes volatile food and energy components, rose 0.1%, as forecast. The Mortgage Bankers Association weekly purchase activity index fell 2.3%, while the refinancing activity index decreased 1.7%, in spite of lower mortgage rates. The average reported 30-year fixed rate last week was 4.91% with 1.30 points. No other data will be released today.

Daily Market Update 3/16/2010

Rates were little changed Tuesday ahead of this afternoon's Fed statement. The Federal Open Market Committee (FOMC) of the Federal Reserve will wrap up their meeting at about 2:15 PM. While no rate change is expected, if the Fed does not renew their pledge to keep rates low "for an extended period" (usually seen as at least six months), mortgage-backed securities markets may react strongly. In economic news, February Housing Starts fell 6%, close to forecast. Building Permits, a leading indicator, fell 2%. Severe winter storms in much of the US may have been a factor.

Daily Market Update 3/15/10

Mortgage rates were unchanged Monday ahead of tomorrow's FOMC meeting. In economic news, February Industrial Production increased 0.1%, slightly above forecast. Stocks moved lower on concerns over the impact of proposed financial reform legislation. No other data will be released today.

Daily Market Update 3/12/10

Mortgage rates inched higher Friday as February Retail Sales rose 0.3%, exceeding forecast by a wide margin. Mortgage-backed securities (MBS) recovered partially from early losses following disappointing data on Consumer Sentiment, which fell unexpectedly last month. Next week will be busy in terms of new economic data, and may be volatile for MBS markets. Figures on Industrial Production will be released Monday, the Fed will hold an FOMC meeting Tuesday to discuss monetary policy, the Producer Price Index (PPI) comes out on Wednesday, and the Consumer Price Index (CPI) on Thursday. No other data will be released today.

Daily Market Update 3/11/10

Rates were little changed Thursday as weekly Jobless Claims came in close to expectations. The January Trade Deficit came in below forecast on lower fuel demands and weaker than expected aircraft and automobile imports. Stocks were mixed. There will be a 30-year Treasury auction at 1:00 PM. February Retail Sales figures will be released tomorrow.

Daily Market Update 3/10/10

Mortgage rates held steady Wednesday ahead of this afternoon's auction of 10-year Treasuries. The Mortgage Bankers Association weekly purchase activity index increased by 6%, while average 30-year fixed rates rose last week to 5.01% with 0.7 points. No economic data will be released today.

Daily Market Update 3/9/10

Mortgage rates were little changed in quiet trading Tuesday ahead of this week's Treasury auctions. The Treasury will auction 3-year notes today, 10-year notes tomorrow, and 30-year bonds on Thursday. Stocks were mixed. No economic data will be released today.

Daily Market Update 3/5/10

Rates were steady, to slightly higher, Friday following release of the February Non-farm Payrolls report. The economy lost 36,000 jobs last month, less than forecast. The Unemployment Rate remained unchanged at 9.7%. The payrolls figures and the unemployment rate are calculated from two separate sets of data. The payrolls report focuses on larger companies, while the unemployment survey covers all companies. The unemployment survey showed an increase of 308,000 jobs in February, indicating that smaller companies were the source of significant job gains. Investors were surprised by the strength of today's data, and mortgage-backed securities (MBS) fell after the news. Stocks moved higher. Next week will be relatively quiet in terms of new economic data, with the exception of Friday's Retail Sales report. MBS markets are likely to be driven mainly by large Treasury auctions of 3-, 10-, and 30-year securities beginning Tuesday.

Daily Market Update 3/4/10

Rates inched lower Thursday on generally weak economic data. Weekly Jobless Claims came in close to expectations at 469,000. Fourth quarter Productivity growth was revised higher to 6.9%. Pending Home Sales fell sharply last month. Unseasonably cold weather throughout much of the US may have been a factor. Factory Orders rose 1.7%, a bit below forecast. The Treasury will announce the size of upcoming auctions at 11:00 AM. The closely watched Non-farm Payrolls report for February will be released tomorrow morning at 8:30.

Daily Market Update 3/3/10

Rates held steady Wednesday. In economic news, the Institute for Supply Management services index rose to 53.0, beating expectations. Readings above 50.0 indicate expansion in the services sector of the economy. The private payroll firm ADP estimated a net loss of 20,000 jobs last month, in line with forecast. This afternoon the Fed will release its Beige Book, a survey of economic activity by the Fed's regional banks, at 2:00 PM.

Daily Market Update 3/2/10

Rates inched higher Tuesday as improvement in the economic prospects for Greece caused investors to move away from the flight to safety, hurting US Treasuries and mortgage-backed securities. Stocks move higher. No economic data will be released today.

Daily Market Update 3/1/10

Mortgage rates were little changed Monday on mixed economic data. The Institute for Supply Management manufacturing index fell to 56.5 last month, a bit more than expected. Readings above 50.0 indicate expansion. Consumer Spending rose 0.5% in January, slightly above forecast. The January Core PCE price index, the Fed's preferred measure of inflation, rose at a tame 1.4% annual rate. Construction Spending fell 0.6%. Stocks moved higher. No other data will be released today.