Daily Market Update 12/23/10

Mortgage rates were little changed Thursday in quiet trading. In economic news, Durable Goods Orders fell 1.3%, a bit more than expected. Excluding volatile transportation orders, however, the results exceeded expectations. November Personal Income rose 0.3%, beating forecast. The Core PCE price index, the Fed's preferred measure of inflation, rose at a tame 0.8% annual rate, matching October's record low level. Weekly Jobless Claims remained unchanged at 420,000. New Home Sales came in at 290,000, a bit weaker than expected. The Treasury will auction $99 billion of 2-, 5-, and 7-year notes next week. Mortgage-backed securities markets will close early today and remain closed until Monday. Merry Christmas!

Daily Market Update 12/22/10

Mortgage rates held steady Wednesday morning. In economic news, third quarter GDP was revised higher to +2.6% annual growth, slightly below forecast. Existing Home Sales rose 5.6%, in line with expectations. The Mortgage Bankers Association weekly purchase activity index fell by 3%, while the refinancing activity index plummeted by 25% on higher interest rates. Average reported 30-year fixed rates for the prior week rose to 4.85% not including fees. No other data will be released today.

Daily Market Update 12/21/10

Rates were little changed Tuesday. No key economic data will be released today, but it may be another volatile session due to extremely light trading volume. Stocks moved higher as tensions eased between North and South Korea.

Daily Market Update 12/20/10

Rates moved lower Monday. The final two weeks of December is often volatile as trading is light, therefore any movement in markets tends to be exaggerated. No economic data will be released today.

Daily Market Update 12/17/10

Mortgage rates inched lower Friday as mortgage-backed securities stabilized for the first time this week. As expected, Congress passed the new tax deal last night. The news had already been priced in, so there was little reaction by investors. Leading Indicators rose 1.1% in November, the most in 8 months, but slightly below expectations. Next week will be relatively quiet in terms of new economic data. Existing Home Sales figures will come out on Wednesday, New Home Sales on Thursday. Durable Goods Orders will also be released on Thursday. The market will be closed next Friday. No other data will be released today.

Daily Market Update 12/16/10

Mortgage rates moved higher Thursday reflecting Wednesday's late sell-off of mortgage-backed securities. 30-year fixed rates have now risen by about 1% over the past five weeks. Trading remains highly volatile. In economic news, November Housing Starts rose 4% to an annual rate of 555,000 units, beating forecast. Separately, Building Permits, a leading indicator, fell 4% to the lowest level since April 2009. Weekly Jobless Claims declined to 420,000, in line with expectations. The tax deal passed the Senate yesterday and a vote in the House is expected today. Investors are waiting for news from Europe about the aid package for countries with debt troubles. No other data will be released today.

Daily Market Update 12/15/10

Mortgage rates stabilized Wednesday morning after rising sharply on Tuesday. The market showed little reaction to today's economic data. The November Consumer Price Index (CPI) rose 0.1% from October, below the consensus forecast of +0.2%, and 1.1% higher than one year ago. Core CPI, which excludes volatile food and energy components, rose at a tame 0.8% annual rate. Industrial Production rose 0.4% in November, slightly above expectations. The Mortgage Bankers Association weekly purchase activity index fell by 5%, while the refinancing activity index decreased by 0.7%. Average reported 30-year fixed rates for the past week rose to 4.84% not including fees, the highest level in seven months. No other key economic data will be released today.

Daily Market Update 12/14/10

Mortgage rates faced upward pressure Tuesday following the release of stronger than expected economic data. The November Producer Price Index rose 0.8% from October, above the consensus forecast of +0.5%, fueling fears of inflation. November Retail Sales rose 0.8%, beating the consensus of +0.5%. Also pressuring mortgage-backed securities markets, the Senate moved closer to passing the tax deal. Investors are concerned about the impact the plan will have on the budget deficit. Today's FOMC meeting announcement will be made at 2:15 PM. No rate changes are expected, but analysts will be looking for an update on the Fed's "quantitative easing" program.

Daily Market Update 12/13/10

Rates continued moving higher Monday after reports from China showed that inflation exceeded forecast. Investors are concerned that higher inflation in China may indirectly lead to higher future inflation in the US. No economic data will be released today, but the rest of the week will be busy. The most closely-watched event for the week will be tomorrow's FOMC meeting of the Fed.

Daily Market Update 12/10/10

Mortgage rates inched higher Friday on stronger than expected economic data. The Trade Deficit fell to $38.7 billion, below the consensus forecast of -$44.0 billion. Import Prices, excluding oil, rose 0.8%. Consumer Sentiment increased to 74.2, beating expectations. Stocks were mixed. Next week will be busy in terms of new data. The Producer Price Index and Retail Sales figures will come out on Tuesday, the Consumer Price Index and Industrial Production on Wednesday. Also Tuesday, the Fed will hold its periodic FOMC meeting to discuss monetary policy. While no rate changes are expected, investors will be watching closely for clues about the future of the Fed's "quantitative easing" program. Rates may remain volatile over the next several days. No other key data will be released today.

Daily Market Update 12/9/10

Mortgage rates were little changed Thursday as mortgage-backed securities prices stabilized for the first time since Monday's announcement of a tentative agreement between the Obama Administration and Republican leaders to extend tax cuts and unemployment benefits. In economic news, weekly Jobless Claims fell to 421,000, below the consensus forecast of 425,000. Stocks were mixed. Results from today's 30-year Treasury auction will be released at 1:00 PM. No other key data will be released today.

Daily Market Update 12/8/10

Rates continued moving higher Wednesday as the Fannie Mae 30-year fixed required net yield reached its highest level since June 3. Concern by investors over budget deficits, weak demand for Treasurys, and the prospect for stronger economic growth as a result of the proposed tax package weighed heavily on the mortgage-backed securities market. Results from today's 10-year Treasury auction will be released at 1:00 PM.

Daily Market Update 12/7/10

Rates spiked Tuesday following news of a tentative agreement between the Obama Administration and Republican leaders on an extension of tax cuts and unemployment benefits. The deal would add an estimated $700 billion to the deficit, which would likely pressure fixed income securities such as Treasurys and mortgage-backed securities. The 10-year Treasury yield hit its highest level since mid-July. Stocks moved modestly higher. No economic data will be released today.

Daily Market Update 12/6/10

Mortgage rates were little changed Monday. With no major economic data scheduled for release this week, investors will be focusing on large Treasury auctions of 3-, 10-, and 30-year securities over three days beginning Tuesday. Other external issues, such as the fate of the Bush tax cuts and extension of unemployment benefits, may influence rates in the coming days.

Daily Market Update 12/3/10

Rates inched lower Friday following a disappointing employment report. The economy added 39,000 jobs last month, well below the consensus forecast of +150,000. The Unemployment Rate rose to 9.8%, the highest level since April. Average Hourly Earnings, a proxy for wage growth, was unchanged. Today's data makes it less likely that the Fed's quantitative easing program will end early. Separately, Factory Orders fell 0.9%, while the Institute for Supply Management services index rose to 55.0. Stocks were mixed. No other data will be released today.

Daily Market Update 12/2/10

Rates moved higher Thursday on stronger than expected housing data and investor optimism over the direction of the economy. The 30-year fixed Fannie Mae required net yield reached its highest level since June 16. Weekly Jobless Claims rose to 436,000, above the consensus forecast of 425,000. The more closely-watched four-week average declined to 431,000, the lowest level in two years. Pending Home Sales surged unexpectedly by 10.4% in October as buyers took advantage of low interest rates and distressed sales. No other data will be released today. Tomorrow, the Non-farm Payrolls report for November will be released at 8:30 AM.

Daily Market Update 12/1/10

Mortgage rates moved higher Wednesday after the President of the European Central Bank suggested that the ECB would purchase additional troubled assets to support weaker nations, reducing the risk of defaults on government debt. Stocks rallied on the news, pushing bond markets lower. In economic news, third quarter Productivity was revised higher to 2.4%, close to forecast. The Institute for Supply Management manufacturing index fell to 56.6, in line with expectations. The Mortgage Bankers Association weekly purchase activity index increased by 1%, while the refinancing activity index decreased by 22% as mortgage rates moved higher. Average reported 30-year fixed rates for the week rose to 4.56%, not including fees. The Beige Book, a survey of economic activity by the Fed's 12 regional banks, will be released at 2:00 PM.