Daily Market Update 11/30/10

Mortgage rates inched lower Tuesday as concerns about the risk of default for government debt in smaller European countries helped bond markets and hurt stock markets. In economic news, the Chicago Purchasing Managers Index rose to 62.5, beating forecast. Readings above 50.0 indicate expansion in the manufacturing sector. Consumer Confidence increased to the highest level since June. No other data will be released today.

Daily Market Update 11/29/10

Rates were little changed Monday as mortgage-backed securities markets resumed normal trading following the holiday weekend. No economic data will be released today.

Daily Market Update 11/24/10

Mortgage rates moved higher Wednesday on the release of stronger than expected economic data. Weekly Jobless Claims fell to 407,000, below the consensus forecast of 440,000, and the lowest level since July 2008. Consumer Sentiment rose to 71.6, the highest reading since June. New Home Sales came in under expectations at 283,000 annual units. Durable Goods Orders fell by 3.3%, more than forecast. The Mortgage Bankers Association weekly purchase activity index increased by 14.4% to the highest level since early May. Stocks rallied, hurting bonds and mortgage-backed securities (MBS). Results from today's 7-year Treasury auction will be released at 1:00 PM. The MBS market will be closed tomorrow in observance of Thanksgiving, and will close early on Friday.

Daily Market Update 11/23/10

Rates inched lower Tuesday following an attack by North Korea on a South Korean island, resulting in a flight to safer investments, hurting stocks and helping bonds and mortgage-backed securities. In economic news, third quarter GDP was revised higher to +2.5%, slightly above forecast. Existing Home Sales fell 2.2%, below expectations. Results were weak for this afternoon's 5-year Treasury auction. No other data will be released today.

Daily Market Update 11/22/10

Rates held steady Monday as mortgage-backed securities markets were more stable than last week. No economic data will be released today. Results from today's 2-year Treasury auction will be released at 1:00 PM.

Daily Market Update 11/19/10

Rates were little changed Friday as mortgage-backed securities (MBS) remained volatile. No key economic data will be released today. Next week the Treasury will auction $99 billion of 2-, 5-, and 7-year notes over three days, beginning Monday. Existing Home Sales figures will come out on Tuesday. Durable Goods Orders and New Home Sales will be released on Wednesday. Also on Wednesday the Fed will release minutes from its last FOMC meeting. Trading volume may be light due to the Thanksgiving holiday, so any movement in MBS markets could be exaggerated.

Daily Market Update 11/18/10

Rates inched higher Thursday as news that a rescue plan for Ireland may be near, causing investors to shift to riskier assets, helping stocks, and hurting bonds and mortgage-backed securities. Weekly Jobless Claims increased to 439,000, close to expectations. Leading Indicators rose 0.5%, matching forecast. The Philadelphia Fed Index, a business outlook survey of manufacturers in Pennsylvania, New Jersey, and Delaware, came in at 22.5, well above the consensus forecast. Stocks moved sharply higher. No other key data will be released today.

Daily Market Update 11/17/10

Mortgage rates were little changed Wednesday in another day of volatile trading. In economic news, the October Consumer Price Index (CPI) rose 0.2%, below the consensus forecast of +0.4%. The more closely-watched "Core" CPI was unchanged, and was a tame 0.6% higher than one year ago. October Housing Starts fell 12%, below expectations, to the lowest level in 18 months. The Mortgage Bankers Association weekly purchase activity index fell by 5%, while the refinancing activity index declined by 17%. Average reported 30-year fixed rates for the prior week rose to 4.46%, not including fees. No other key data will be released today.

Daily Market Update 11/16/10

Rates inched higher Tuesday in extremely volatile trading. Weaker than expected economic data initially helped mortgage-backed securities markets, but unfavorable repricing began occurring by late-morning. In economic news, the October Producer Price Index (PPI) rose 0.4%, below the consensus forecast of 0.8%. Core PPI, which excludes food and energy components, fell 0.6%, and was 1.5% higher than one year ago. October Industrial Production was flat, which was also below expectations. Stocks moved sharply lower. No other data will be released today.

Daily Market Update 11/15/10

Mortgage rates have moved higher by about 1/4% since last Wednesday after the Fed began purchases of Treasury securities under its new "quantitative easing" program. Investors wanted to sell a much larger quantity of Treasurys than the Fed was purchasing, so a rush to sell pushed yields higher. Anticipation of the Fed's program had pushed rates down to the lowest level in decades. There has been strong opposition to the program from other countries and from many US politicians and economists, including some within the Fed, meaning expansion of the plan is unlikely unless the economy falters. It may be difficult for mortgage rates to hold near record lows, and investors have been selling mortgage-backed securities on this outlook. In economic news, October Retail Sales rose 1.2%, beating forecast. The Producer Price Index will be released tomorrow and the Consumer Price Index will come out on Wednesday.

Daily Market Update 11/10/10

Rates stabilized Wednesday following Tuesday's late sell off of mortgage-backed securities. Weekly Jobless Claims fell to 435,000, below the consensus forecast of 450,000. October Import Prices excluding oil rose 0.3%, the same as last month. The September Trade Deficit came in at $44 billion, close to expectations. The Mortgage Bankers Association weekly purchase activity index and refinancing activity index both rose by 6%. Average reported 30-year fixed rates for the week were unchanged at 4.28%, not including fees. Results from today's 30-year Treasury auction will be released at 1:00 PM. The market will be closed tomorrow for Veteran's Day.

Daily Market Update 11/9/10

Mortgage rates moved higher Tuesday as unfavorable repricing took place throughout the day. No economic data came out today, but investors expressed concerns about owning mortgage-backed securities (MBS) at current yields as the Fed moves forward with its "quantitative easing" plan. The dollar has been moving lower and commodities prices higher since last week's Fed announcement. Many analysts expect inflationary pressures to build in the coming months. Import Prices, the Trade Balance, and Jobless Claims will be released tomorrow. The MBS market will be closed Thursday in observance of Veteran's Day.

Daily Market Update 11/8/10

Mortgage rates were little changed Monday in quiet trading. No key economic data will be released today. Results from today's 3-year Treasury auction will be released at 1:00 PM.

Daily Market Update 11/5/10

Mortgage rates faced upward pressure Friday following the release of stronger than expected employment data. The economy added 151,000 jobs in October, easily beating forecast. The Unemployment Rate remained at 9.6%. Average hourly earnings, a proxy for wage growth, rose 0.2% from September. Mortgage-backed securities markets have been extremely volatile all week, but overall, rates have improved by about .125% for the week. No other data will be released today.

Daily Market Update 11/4/10

Mortgage rates inched lower Thursday in volatile trading. This morning, mortgage-backed securities (MBS) markets reacted favorably to yesterday's Fed announcement that it would purchase $600 billion of US Treasurys in the coming months. As demand for Treasuries increases, other bond investments, including MBS's, become relatively more attractive to investors. In economic news, weekly Jobless Claims rose to 457,000, above forecast. Third quarter Productivity rose 1.9%, beating expectations. Stocks rallied to their highest levels since September 2008, before the collapse of Lehman Brothers. The closely-watched Non-farm Payrolls report will be released tomorrow at 8:30 AM. No other data will be released today.

Daily Market Update 11/3/10

Mortgage rates eased Wednesday following the outcome of the mid-term elections, with Republicans taking control of the House and gaining seats in the Senate. In economic news, Factory Orders rose 2.1%, beating expectations. The Institute for Supply Management services index reading came in at 54.3, slightly above forecast. The FOMC meeting of the Federal Reserve will wrap up at 2:15 PM. While no rate change is expected, the Fed is likely to announce the details of its new monetary stimulus program. The news may produce a large reaction in the mortgage-backed securities market.

Daily Market Update 11/1/10

Rates were little changed Monday following the release of mixed economic data. Mortgage-backed securities (MBS) markets have been volatile. MBS prices initially rose on news that September Personal Income fell 0.1%, below the consensus forecast of +0.2%. The Core PCE price index rose at a tame 1.2% annual rate, indicating inflation is not a concern in the near term. MSB prices gave up early gains when the Institute for Supply Management manufacturing index rose to 56.9 from 54.4. A small decline had been anticipated. Separately, Construction Spending increased unexpectedly by 0.5%. The next few days may be especially volatile, with the mid-term election results coming out late Tuesday and the FOMC meeting of the Fed on Wednesday. No other data will be released today.