Daily Market Update 1/28/11

Rates were little changed Friday, ending the week close to where they started. In economic news, preliminary Gross Domestic Product (GDP) estimates showed 3.2% growth in the economy during the fourth quarter of 2010, below the consensus forecast of +3.7%. However, consumer spending was stronger than expected, which is a positive sign for the economy in 2011. Consumer Sentiment rose to 74.2 in late January, beating expectations. Next week, the Chicago Purchasing Managers Index will be released on Monday, the Institute for Supply Management manufacturing index on Tuesday, and the closely-watched Employment Report on Friday. No other key data will be released today.

Daily Market Update 1/27/11

Rates held steady Thursday on mixed economic data. Weekly Jobless Claims jumped to 454,000, well above forecast, however snowstorms last week may have distorted the results. December Durable Goods Orders fell by 2.5%. An increase of 1.5% had been expected. Pending Home Sales rose 2%, beating expectations. Results from today's 7-year Treasury auction will be released at 1:00 PM. No other key data will be released today.

Daily Market Update 1/26/11

Mortgage rates were little changed Wednesday as mortgage-backed securities markets gave back yesterday afternoon's gains. Last night, President Obama called for a five-year budget freeze on non-security discretionary spending, but investors expressed doubt that the move would have a significant impact on the deficit. Separately, the non-partisan Congressional Budget Office reported that the 2011 deficit will likely top $1.5 trillion. In economic news, December New Home Sales rose 18% to the highest level in 8 months, beating forecast. The Mortgage Bankers Association weekly purchase activity index fell 9%, while the refinancing activity index declined 15%, to the lowest level since last January. Average reported 30-year fixed rates rose to 4.80%, not including fees. Results from today's 5-year Treasury auction will be released at 1:00 PM. Today's FOMC meeting of the Fed will wrap up at about 2:15 PM. Investors are expecting an upgrade on the performance of the economy, but no change in the direction of monetary policy.

Daily Market Update 1/25/11

Mortgage rates held steady Tuesday in another day of volatile trading. In economic news, Consumer Confidence rose more than expected to a reading of 60.6, the highest level in eight months. Analysts credited recent improvements in the job market for the increase. Results from today's 2-year Treasury auction will be released at 1:00 PM.

Daily Market Update 1/24/11

Rates were little changed Monday in volatile trading ahead of a big week for economic news. No data will be released today, but Wednesday's Fed meeting, Friday's GDP report, and three large Treasury auctions may influence trading in mortgage-backed securities.

Daily Market Update 1/21/11

Rates were little changed Friday in volatile trading. No economic data will be released today. Next week will be busy, beginning with Wednesday's FOMC meeting of the Fed. While no rate changes are expected, investors will be watching closely for clues about the future direction of monetary policy. December New Home Sales figures will be released on Wednesday, Pending Home Sales and Durable Goods Orders on Thursday. Advanced fourth quarter Gross Domestic Product (GDP) estimates will come out on Friday. Also next week, the Treasury will hold large auctions of 2-, 5-, and 7-year notes over three days, beginning Tuesday. The Obama Administration is due to release a report on the future of Fannie Mae and Freddie Mac in late January. There will be considerable debate in coming months over the proper role of the federal government in the housing finance industry.

Daily Market Update 1/20/11

Mortgage rates inched higher Thursday following the release of stronger than expected economic data. Weekly Jobless Claims fell to 404,000, below the consensus forecast of 425,000. Investors are hopeful that we are now in an average range close to the 400,000 level, down from the 450,000 level maintained throughout much of 2010. Existing Home Sales surged in December to 5.28 million annual units, a seven month high, easily beating expectations. The median home price fell 1% from one year earlier, to $168,800. Leading Indicators rose 1.0%. An increase of 0.6% had been forecast. No other key data will be released today.

Daily Market Update 1/19/11

Rates were little changed Wednesday in volatile trading. December Housing Starts fell 4.3% to an annual pace of 529,000 units, below forecast. Meanwhile, Building Permits, a leading indicator, rose 17%, to the highest level since March. Stocks were mixed. No other economic data will be released today.

Daily Market Update 1/18/11

Mortgage rates faced upward pressure Tuesday following news that China was a net seller of US Treasury securities in November. China is an important buyer of US debt, and the announcement caught investors by surprise. In economic news, the Empire State index came in at 11.9, very close to forecast. Stocks moved higher. No other key data will be released today.

Daily Market Update 1/17/11

The mortgage-backed securities market is closed today in observance of Martin Luther King, Jr. Day. Markets will reopen tomorrow morning.

Daily Market Update 1/14/11

Mortgage rates were little changed Friday, ending the week about where they started. In economic news, the December Consumer Price Index (CPI) rose 0.5%, above the consensus forecast, but just 1.5% higher than one year ago. Core CPI, excluding volatile food and energy components, rose 0.1% last month, and was 0.8% higher than December 2009. Retail Sales fell short of expectations, rising 0.6% from November. Industrial Production rose 0.8%, well above forecast. Capacity Utilization increased to 76.0%, the highest level since August 2008. Consumer Sentiment declined unexpectedly. Overall, today's data showed slowly improving economic growth with low inflation. No other key data will be released today.

Daily Market Update 1/13/11

Rates were little changed Thursday following the release of mixed economic data. Weekly Jobless Claims rose to 445,000, well above forecast, and to the highest level since October. The Trade Deficit was lower than expected at $38.3 billion. The December Producer Price Index (PPI) increased 1.1% from November, above the consensus forecast of 0.8%. Core PPI, which excludes food and energy components, rose 0.2% and was a tame 1.3% higher than one year ago. Results from today's 30-year Treasury auction will be released at 1:00 PM.

Daily Market Update 1/12/11

Mortgage rates inched higher Wednesday as a strong bond auction in Portugal eased investor concerns and lifted global stock markets, reversing a flight to safety that has helped US bonds and mortgage-backed securities. In economic news, December Import Prices, excluding oil, rose 0.3%. The Beige Book, a survey of economic activity by the Fed's 12 regional banks, will be released at 2:00 PM. The Mortgage Bankers Association weekly purchase activity index fell 4%, while the refinancing activity index rose 5%. Results from today's 10-year Treasury auction will be released at 1:00 PM.

Daily Market Update 1/11/11

Rates held steady Tuesday in light trading. Results from today's 3-year Treasury auction will be released at 1:00 PM. No key economic data will be released today.

Daily Market Update 1/10/11

Mortgage rates were little changed Monday in quiet trading. Mortgage-backed securities received a small boost from weakness in the stock market, but no key economic data will be released today.

Daily Market Update 1/7/11

Mortgage rates inched lower Friday following a disappointing Employment Report. The economy added 103,000 jobs in December, well below forecast. Surprisingly, the Unemployment Rate fell to 9.4% from 9.8%, the lowest level in 19 months. Economists suggest that seasonal factors may have been a factor in the large reduction. Over the last three months, the economy added an average of 128,000 jobs per month, roughly the number needed to keep pace with population growth. This morning, in testimony before the Senate Budget Committee, Fed Chairman Ben Bernanke said "it could take four to five more years for the job market to normalize fully". Next week, the December Producer Price Index will be released on Thursday, the Consumer Price Index, Retail Sales, and Industrial Production on Friday. No other key data will be released today.

Daily Market Update 1/6/11

Mortgage rates were little changed Thursday. Weekly Jobless Claims rose to 409,000, slightly above forecast. Meanwhile, the four-week average fell to 411,000, the lowest level since July 2008. December Retail Sales rose 3.1%, a bit less than expected. The closely-watched monthly Employment Report for December will be released tomorrow at 8:30 AM. No other key data will be released today.

Daily Market Update 1/5/11

Rates moved higher Wednesday on stronger than expected economic data. This morning, private payroll firm ADP forecast 300,000 private sector job gains in December, causing investors to raise their expectations for this Friday's Employment Report. Separately, the Institute for Supply Management services index reading came in at 57.1, indicating the fastest pace of growth in the services sector of the economy since May 2006. Stocks moved higher. No other data will be released today.

Daily Market Update 1/4/11

Mortgage rates were little changed Tuesday ahead of this afternoon's release of minutes from the December 14 FOMC meeting of the Fed. Investors will be watching to see the level of support for the Fed's quantitative easing program. The FOMC Minutes will be released at 2:00 PM. In economic news, Factory Orders rose by 0.7% in November, beating expectations. No other key data will be released today.

Daily Market Update 1/3/11

Mortgage rates inched lower Monday, reflecting gains in mortgage-backed securities late last week. This morning, some upward pressure on rates resulted from a rally in the stock market. The Institute for Supply Management manufacturing index reading came in at 57.0, in line with expectations. Readings above 50.0 indicate expansion in the manufacturing sector of the economy. Construction Spending rose 0.4% last month, beating forecast. No other data will be released today. Happy New Year!