Daily Market Update 8/31/11

Rates were little changed Wednesday in volatile trading.  This morning, the Chicago PMI manufacturing index fell to 56.5, beating forecast.  Payroll firm ADP estimated a net gain of 91,000 private sector jobs in August ahead of this Friday's Employment Report, a bit less than expected.  Factory Orders rose 2.4%, led by the transportation component.  Stocks moved higher.  The Mortgage Bankers Association weekly purchase activity index increased by 0.9%, while the refinancing activity index decreased by 12.2%.  Average reported 30-year fixed rates fell to 4.32%, not including fees.  No other key data will be released today.

Daily Market Update 8/30/11

Mortgage rates eased slightly Tuesday following the release of weaker than expected economic data.  Consumer Confidence plummeted in August to 44.5, its lowest reading since April 2009, and well below the consensus forecast of 52.0.  Federal Reserve Bank of Chicago President Charles Evans said in an interview this morning that he would "favor more accommodation" by the Fed, citing weak economic growth in the first half of the year.  Minutes from last month's FOMC meeting of the Fed will be released at 2:00 PM.

Daily Market Update 8/29/11

Rates moved higher Monday as a rally in global stock markets hurt mortgage-backed securities.  Investors were relieved that damage from Hurricane Irene was less severe than had been expected.  In economic news, the July Core PCE price index, one of the Fed's preferred measures of inflation, increased 0.2% from June, matching expectations.  Personal Income rose by 0.3%, slightly below the consensus forecast.  Pending Home Sales fell 1.3%, a bit less than expected.  No other key data will be released today.

Daily Market Update 8/26/11

Mortgage rates inched lower Friday as second quarter GDP was revised down to 1.0% from 1.3%.  In a much-anticipated speech this morning, Fed Chairman Ben Bernanke said that the Fed will consider additional monetary stimulus measures at its September meeting and will implement them if appropriate, but that fiscal policy changes by lawmakers are needed to help boost the economy and labor market.  He gave no indication that the Fed will loosen monetary policy.  The big event next week will be Friday's Employment Report for August.  Also next week, the Institute for Supply Management manufacturing index will be released on Thursday.  No other key data will be released today.

Daily Market Update 8/25/11

Rates held steady Thursday as mortgage-backed securities recovered from losses that occurred late Wednesday.  This morning, weekly Jobless Claims rose to 417,000, above forecast, but most of the increase resulted from a labor strike at Verizon.  Results from today's 7-year Treasury auction will be released at 1:00 PM.

Daily Market Update 8/24/11

Mortgage rates were little changed Wednesday.  In economic news, July Durable Goods Orders rose 4.0%, well above the consensus forecast of +2.0%.  Excluding the volatile transportation component, orders rose 0.7%, also beating expectations.  The Federal Housing Finance Agency reported that home prices fell 5.9% during the second quarter from one year earlier, the biggest drop since 2009.  The Mortgage Bankers Association weekly purchase activity index fell 5.9%, to the lowest level since December 1996.  The refinancing activity index declined by 1.7%, as average reported 30-year fixed rates rose last week to 4.39%, not including fees.  Results from today's 5-year Treasury auction will be released at 1:00 PM.  Fed Chairman Ben Bernanke will be delivering a highly anticipated speech at the annual Fed meeting in Jackson Hole, WY on Friday.  Some analysts are expecting Bernanke to announce new economic stimulus by the Fed.

Daily Market Update 8/22/11

Mortgage rates faced upward pressure Monday as a rally in global stock markets pushed mortgage-backed securities lower.  No key economic data will be released today.

Daily Market Update 8/19/11

Mortgage rates moved higher Friday after hitting 50-year lows yesterday.  Investors are expressing concerns that the Fed's pledge to hold short-term rates near zero until mid-2013 risks an inflationary surge once the economy begins to improve.  Also, some lenders have begun increasing margins to slow refinancing volume due to capacity limitations.  No key economic data will be released today.  Next week, New Home Sales will come out on Tuesday, Durable Goods Orders on Wednesday, and revised second quarter GDP figures on Friday.

Daily Market Update 8/18/11

Rates inched lower Thursday as weakness in global stock markets lifted mortgage-backed securities.  The Wall Street Journal reported that the Federal Reserve Bank of New York has increased its scrutiny of large European banks with U.S. operations over concerns that the banks may lack reliable access to the funds needed for day-to-day operations.  In economic news, weekly Jobless Claims rose to 408,000, above the consensus forecast of 400,000.  The July Consumer Price Index (CPI) increased 0.5% from June, more than expected, and was 3.6% higher than one year ago.  Core CPI, which excludes food and energy components, rose a more tame 0.2%, in line with expectations.  Existing Home Sales fell unexpectedly by 3.5%.  Leading Indicators rose 0.5%, beating forecast.  No other key economic data will be released today.

Daily Market Update 8/17/11

Mortgage rates dipped Wednesday in spite of an unexpected increase in wholesale prices.  The July Producer Price Index (PPI) rose 0.2% from June, and was 7.2% higher than one year ago.  Core PPI, which excludes volatile food and energy components, rose 0.4% in July, and 2.5% year-over-year.  Stocks moved higher.  No other key data will be released today.

Daily Market Update 8/16/11

Mortgage rates held steady Tuesday as the impact of stronger than expected economic data was offset by weakness in stock markets.  July Housing Starts fell 1.5% to an annual rate of 604,000 units, in line with expectations.  Industrial Production rose 0.9%, above the consensus forecast of +0.5%, to the fastest pace in seven months.  European officials are meeting to discuss support for European banks.  No other key data will be released today.

Daily Market Update 8/15/11

Rates were little changed Monday as last week's extreme market volatility began to settle.  In economic news, the Empire State Index fell to -7.7, below the consensus forecast of +1.0.  No other key data will be released today.

Daily Market Update 8/12/11

Mortgage rates held steady Friday, ending one of the most volatile weeks ever.  Yesterday, rates reached new lows for the year.  This morning, July Retail Sales rose 0.5%, in line with expectations.  Consumer Sentiment fell to the lowest level since May 1980.  No other key data will be released today.  Next week, Industrial Production will come out on Tuesday, the Producer Price Index on Wednesday, and the Consumer Price Index and Existing Home Sales on Thursday.

Daily Market Update 8/11/11

Mortgage rates were little changed Thursday as stocks rebounded from yesterday's steep losses.  Trading remains highly volatile.  In economic news, weekly Jobless Claims fell to 395,000, below forecast, to the lowest level since April.  The June Trade Deficit rose to $53.1 billion, larger than expected.  Results from today's 30-year Treasury auction will be released at 1:00 PM.

Daily Market Update 8/10/11

Mortgage rates moved lower Wednesday on the heals of yesterday's unprecedented Fed statement.  The Federal Open Market Committee said it "currently anticipates" that economic conditions "warrant exceptionally low levels for the federal funds rate at least through mid-2013".  Stocks, bonds, and mortgage-backed securities rallied on the news, although US stock markets fell sharply this morning on concerns about European banks.  The Fed has never before provided such an extended outlook for its monetary policy intentions, and this may be an indication that the Fed is running out of tools to stoke economic growth.  It also underscores the level of weakness in the economy as viewed by the Fed.  In the near term, it should bode well for mortgage rates, and may help boost the depressed real estate market.  No key economic data will be released today.  Results from today's 10-year Treasury auction will be released at 1:00 PM.

Daily Market Update 8/9/11

Rates inched higher Tuesday morning as stocks partially recovered from yesterday's drubbing.  The Federal Open Market Committee (FOMC) of the Fed is meeting today to discuss monetary policy and will release a statement at 2:15 PM.  Investors will be watching closely for indications of further stimulus by the Fed.  In economic news, second quarter Productivity fell by 0.3%, a bit less than forecast.  Results from today's $32 billion 3-year Treasury auction, the first since Friday's US credit downgrade by S&P, will be released at 1:00 PM.

Daily Market Update 8/8/11

Rates moved lower Monday in spite of S&P's credit ratings downgrades of Fannie Mae, Freddie Mac, and Federal Home Loan Bank debt.  These follow Friday's downgrade of US debt.  A flight to quality from riskier assets, such as stocks and commodities, boosted Treasury bonds and mortgage-backed securities.  Oil prices fell sharply, while gold prices surged.  Investors are also focusing on the slowing pace of global economic growth.  Markets are likely to remain extremely volatile in the coming days.  No key economic data will be released today.

Daily Market Update 8/5/11

Mortgage rates inched higher Friday following a better than expected Employment Report.  The economy added 117,000 jobs in July, beating the consensus forecast of 85,000.  The Unemployment Rate unexpectedly declined to 9.1%.  Average Hourly Earnings, a proxy for wage growth, increased at a 2.3% annual rate, which was higher than expected.  Although the employment picture remains weak, today's data exceeded expectations in nearly every area, pushing stocks modestly higher and hurting bonds and mortgage-backed securities.  The big event next week will be Tuesday's FOMC meeting of the Fed.  While no rate change is expected, investors will be looking for indications that the Fed may be considering other stimulative measures.  Also next week, Retail Sales figures for July will be released on Friday.  No other key data will be released today.

Daily Market Update 8/4/11

Rates inched lower Thursday as concerns about debt problems in weaker European nations hurt stock markets and lifted mortgage-backed securities.  The European Central Bank (ECB) made no change in interest rates, as expected.  Weekly Jobless Claims came in at 400,000, matching forecast.  Tomorrow, the closely-watched Employment Report for July will be released at 8:30 AM.  No other data will be released today.

Daily Market Update 8/3/11

Rates continued their downward trend Wednesday as weakness in stock markets boosted bonds and mortgage-backed securities.  In economic news, payroll firm ADP forecast private sector job growth of 117,000 in July ahead of this Friday's Employment Report.  Factory Orders declined 0.8%, close to expectations.  The Institute for Supply Management services index fell to 52.7, a bit below forecast.  Readings above 50.0 indicate expansion in the services sector of the economy.  The Mortgage Bankers Association weekly purchase activity index rose by 5.1%, while the refinancing activity index increased by 7.8%.  Average reported 30-year fixed rates fell to 4.45%, not including fees.  No other key data will be released today.

Daily Market Update 8/2/11

Mortgage rates inched lower Tuesday, and are now at their lowest levels since November.  This morning, the June Core PCE price index, a preferred measure of inflation by the Fed, rose 0.1%, below the consensus forecast of +0.2%.  June Personal Income increased 0.1%, matching expectations.  Consumer Spending declined unexpectedly.  Last night the House passed a proposed $2.4 trillion debt ceiling increase.  The Senate is expected to pass the measure today and send it to the White House for final approval by President Obama.  Stocks moved sharply lower.  No other key data will be released today.

Daily Market Update 8/1/11

Rates moved lower Monday on weaker than expected economic data and optimism over a proposed debt ceiling increase.  The proposal calls for about $2.4 trillion in spending cuts over 10 years.  If passed, it's not clear whether the deficit reduction would be enough to prevent a downgrade in the credit rating of the US.  In economic news, the Institute for Supply Management manufacturing index fell to 50.9, far below forecast.  Readings above 50.0 indicate expansion in the manufacturing sector of the economy.  Construction Spending rose 0.2%, in line with expectations.  No other key data will be released today.