Daily Market Update 10/31/11

Mortgage rates moved lower Monday as a decline in stock markets boosted mortgage-backed securities (MBS).  In economic news, the Chicago Purchasing Managers Index fell to 58.4, below the consensus forecast, to the lowest level since May.  U.S. securities firm MF Global Holdings filed Chapter 11 bankruptcy this morning, an apparent casualty of the European sovereign debt crisis.  The Federal Reserve begins its two-day FOMC meeting tomorrow.  Five of the ten voting members have voiced disagreement with recent Fed policy, three of whom believe the Fed has done too much to ease credit, two who believe the Fed has done too little.  A statement will be released by the Fed on Wednesday.  MBS markets may remain volatile all week.  In addition to the Fed meeting, October's Employment Report will be released on Friday.

Daily Market Update 10/28/11

Mortgage rates inched lower Friday as mortgage-backed securities recovered from yesterday's losses.  This morning, the September Core PCE price index, one of the Fed's preferred measures of inflation, was unchanged from August and a modest 1.6% higher than one year ago.  Personal Income increase by 0.1%, less than expected.  Consumer Sentiment rose to 60.9, beating expectations.  Next week is likely to be extremely volatile.  The Federal Open Market Committee (FOMC) of the Fed will wrap up a two day meeting to discuss monetary policy on Wednesday.  No rate changes are expected, but investors will be watching for news of additional stimulus plans.  Non-farm Payrolls, the most closely-watched economic report of the month, will be released on Friday.  Also next week, the ISM manufacturing index will come out on Tuesday.  No other key data will be released today.

Daily Market Update 10/27/11

Rates moved higher Thursday as European leaders announced a comprehensive aid package that eased investors' concerns.  Stocks rallied, hurting bonds and mortgage-backed securities.  In economic news, weekly Jobless Claims fell to 402,000, close to expectations.  Preliminary third quarter GDP figures reported growth of 2.5%, matching forecast.  September Pending Home Sales declined by 4.6%, much more than expected.  Results from today's 7-year Treasury auction will be released at 1:00 PM.

Daily Market Update 10/26/11

Rates inched higher Wednesday, giving back yesterday's gains.  Trading remained volatile as investors continued to focus on Europe.  This morning, optimism that European leaders will agree on a comprehensive aid package lifted stocks and hurt mortgage-backed securities.  In economic news, Durable Goods Orders fell by 0.8%, a bit less than expected.  Excluding the transportation component, Durable Orders rose 1.7%, beating forecast.  New Home Sales increased by 5.7% in September to 313,000 annual units.  Unit sales of 300,000 had been expected.  Results from today's 5-year Treasury auction will be released at 1:00 PM.

Daily Market Update 10/25/11

Mortgage rates moved lower Tuesday as comments from European officials suggested that a comprehensive aid package may be delayed.  Healthier countries would be required to aid troubled countries in return for greater fiscal discipline.  It appears Italy may be reluctant to make the deep spending cuts asked for in the plan.  Stocks moved lower.  In economic news, Consumer Confidence fell sharply to 39.8 from 45.4.  An increase to 46.0 had been expected.  No other key data will be released today.

Daily Market Update 10/24/11

Rates inched higher Monday as strength in stock markets hurt mortgage-backed securities.  Investors remain focused on Europe, with a big announcement expected on Wednesday.  European officials are working on a broad aid package, and details will be released following Wednesday's summit.  No key economic data will be released today.

Daily Market Update 10/17/11

Rates were little changed Monday as mortgage-backed securities recovered from Friday's losses.  In economic news, September Industrial Production increased 0.2%, matching forecast.  Earlier today, German Finance Minister Wolfgang Schaeuble lowered expectations for an immediate solution to the Euro Zone's sovereign debt crisis.  Stocks moved lower.  No other key data will be released today.

Daily Market Update 10/14/11

Rates were little changed Friday as mortgage-backed securities gave up Thursday's gains.  In economic news, Retail Sales rose by 1.1%, well above the consensus forecast of +0.6%.  September Import Prices increased by 0.3%.  Consumer Sentiment fell to 57.5, below expectations.  Next week will be busy in terms of new economic data.  Industrial Production will be released on Monday, the Producer Price Index on Tuesday, and the Consumer Price Index on Wednesday.  We will also get figures on Housing Starts and Existing Home Sales on Wednesday and Thursday.  No other key data will be released today.

Daily Market Update 10/12/11

Mortgage rates were little changed Wednesday, but have risen by about 3/8% over the past week, as investors have expressed renewed optimism over the European debt crisis and the September Employment Report.  Minutes from last month's FOMC meeting of the Fed will be released at 2:00 PM.  Results from today's 10-year Treasury auction will be released at 1:00 PM.  The Mortgage Bankers Association weekly purchase activity index rose by 1.1%, while the refinancing activity index increased by 1.3%.  Average reported 30-year fixed rates rose to 4.25%, not including fees.

Daily Market Update 10/7/11

Rates moved higher Friday following the release of stronger than expected employment data.  The economy added 103,000 jobs in September, well above the consensus forecast of +60,000.  Also, the data for July and August were revised higher by 99,000.  The Unemployment Rate remained at 9.1%.  Average Hourly Earnings, a proxy for wage growth, increased by 0.2%.  The relative strength of the report reduces the likelihood of another recession.  Stocks moved higher.  Next week, minutes from last month's FOMC meeting of the Fed will be released on Tuesday, Retail Sales will come out on Friday.  No other key data will be released today.

Daily Market Update 10/6/11

Mortgage rates inched higher Thursday ahead of tomorrow's closely-watched Employment Report.  In economic news, weekly Jobless Claims rose to 401,000, slightly above expectations.  Freddie Mac reported that average 30-year fixed rates fell last week to a record low 3.94% with 0.8 points.  No other data will be released today.

Daily Market Update 10/5/11

Rates inched higher Wednesday following the release of stronger than expected economic data.  This morning, payroll firm ADP estimated a net gain of 91,000 private sector jobs in September ahead of Friday's Employment Report, beating forecast.  The Mortgage Bankers Association weekly purchase activity index fell by 1%, while the refinancing activity index decreased by 5%.  Average reported 30-year fixed rates declined to 4.18%, not including fees.  No other key data will be released today.

Daily Market Update 10/4/11

Mortgage rates were little changed Tuesday in volatile trading.  Factory Orders declined 0.2% in August, a bit more than expected.  Fed Chairman Ben Bernanke testified before the Joint Economic Committee in Congress this morning, saying the Fed is prepared to take additional steps to help boost the economy.  Meanwhile, two regional Federal Reserve Bank presidents and well-known inflation hawks, Jeff Lacker and Richard Fisher, expressed concern that additional Fed easing could lead to inflation and cause more harm than good.  Stocks moved lower.  No other key data will be released today.