Daily Market Update 2/29/12

Mortgage rates faced upward pressure Wednesday following comments by Fed Chairman Ben Bernanke.  In prepared testimony before the House Financial Services Committee, Bernanke said the recent rise in gasoline prices "is likely to push up inflation temporarily", although he indicated that monetary stimulus by the Fed remains warranted, and that inflation is likely to "remain subdued" in the longer term.  In economic news, fourth quarter GDP was revised higher to 3.0% from 2.8%.  The Chicago Purchasing Managers Index jumped to 64.0, beating forecast.  The Mortgage Bankers Association weekly purchase activity index rose 8.2%, while the refinancing activity index fell by 2.2%.  Average reported 30-year fixed rates declined to 4.07%, 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.

Daily Market Update 2/28/12

Mortgage rates held steady Tuesday following the release of mixed economic data.  January Durable Goods Orders tumbled 4.0%, below the consensus forecast for a decline of 1.0%, and the largest decrease since January 2009.  Consumer Confidence rose to 70.8, beating expectations.  The S&P/Case-Shiller 20-city home price index was 4.0% lower than one year ago.  No other key data will be released today.

Daily Market Update 2/27/12

Mortgage rates were little changed Monday in quiet trading.  In economic news, the National Association of Realtors reported Pending Home Sales increased 2.0% in January, beating forecast.  The data had little impact on mortgage-backed securities, as December sales figures were revised lower.  No other key data will be released today.

Daily Market Update 2/23/12

Mortgage rates were little changed Thursday.  Weekly Jobless Claims came in at 351,000, slightly below the consensus forecast of 355,000.  Results from today's 7-year Treasury auction will be released at 1:00 PM.

Daily Market Update 2/22/12

Rates held steady Wednesday as mortgage-backed securities recovered from losses sustained late Tuesday.  In economic news, Existing Home Sales rose by 4.3% to 4.57 million annual units, below expectations.  The National Association of Realtors reported a 2% drop in the median home price in January to $154,700, the lowest level since November 2001.  The Mortgage Bankers Association weekly purchase activity index fell 2.9%, while the refinancing activity index declined by 4.8%.  Average reported 30-year fixed rates rose to 4.09%, not including fees.  The rare combination of low home prices and historically low interest rates have boosted home sales in recent months, particularly among investors and first-time buyers.  Results from today's 5-year Treasury auction will be released at 1:00 PM.

Daily Market Update 2/21/12

Rates were little changed Tuesday in quiet trading.  This morning, European officials agreed to provide a $172 billion bailout package to Greece.  As a result, Greece will be able to avoid defaulting on debt maturing on March 20th.  Investors showed little reaction to the news.  Questions remain about whether Greek leaders will fully implement the deeply unpopular austerity measures called for in the deal.  No key economic data will be released today.

Daily Market Update 2/17/12

Mortgage rates inched higher Friday on renewed optimism that Greece will reach an agreement for a financial bailout package with the ECB.  In economic news, the January Consumer Price Index (CPI) rose 0.2% and was 2.9% higher than one year ago.  Core CPI, which excludes food and energy components, also rose 0.2%, above the consensus forecast of +0.1%.  Leading Indicators increased by 0.4%, close to expectations.  Mortgage-backed securities markets will be closed on Monday in observance of Presidents' Day.  No other key data will be released today.

Daily Market Update 2/16/12

Rates inched higher Thursday following the release of stronger than expected economic data.  Weekly Jobless Claims fell to 348,000, below forecast, to the lowest level since March 2008.  The Producer Price Index rose a tame 0.1%, although the more closely watched "core" rate, which excludes volatile food and energy components, jumped 0.4%.  The Philadelphia Fed manufacturing index came in at 10.2, slightly above expectations, while Housing Starts rose 1.5% to 699,000 annual units, beating the consensus forecast of 670,000.  No other key data will be released today.

Daily Market Update 2/15/12

Rates held steady Wednesday following the release of mixed economic data.  The Empire State index came in much higher than expected, while Industrial Production was flat in January.  Minutes from last month's FOMC meeting of the Fed will be released at 2:00 PM.  Congress appears to have reached an agreement on the extension of the payroll tax cut and unemployment benefits through year-end.  The deal will increase the annual federal budget deficit by an estimated $100 million for 2012.

Daily Market Update 2/14/12

Rates inched lower Tuesday as stocks fell on disappointing sales figures.  January Retail Sales rose 0.4%, far below the consensus forecast of +0.8%.  Import Prices increased 0.3%, matching expectations.  No other key data will be released today.

Daily Market Update 2/13/12

Mortgage rates were little changed Monday in quiet trading.  The market showed little reaction to the passage of a new austerity program by the Greek Parliament.  The situation there remains volatile, as Greek citizens rioted in the streets to protest the measures.  No key economic data will be released today, but the remainder of the week will be busy.  January Retail Sales figures will be released tomorrow, Industrial Production and minutes from last month's FOMC meeting will come out on Wednesday, the Producer Price Index on Thursday, and the Consumer Price Index on Friday.

Daily Market Update 2/9/12

Mortgage rates faced upward pressure Thursday.  This morning, Greek leaders announced they have reached an agreement on austerity measures that meet the demands of the ECB and IMF, paving the way for Greece to receive additional financial aid.  In the U.S., weekly Jobless Claims declined unexpectedly to 358,000, below the consensus forecast of 370,000.  The Justice Department will announce a $26 billion settlement agreement with the nation's five largest mortgage servicers over the "robo-signing" scandal, whereby faulty documents were used to expedite the foreclosure process.  $17 billion will be provided in the form of mortgage debt forgiveness, while $3 billion will be used to lower mortgage interest rates for delinquent borrowers.  Critics point out that responsible homeowners who are current in their payments will receive nothing from the deal, setting a dangerous precedent and creating a potential moral hazard.  While I am no fan of these five institutions, certain aspects of the settlement are disturbing and seem politically motivated.  No other key economic data will be released today.

Daily Market Update 2/8/12

Mortgage rates were little changed Wednesday in quiet trading.  Investors were mainly watching for progress on a Greek debt deal.  Stocks moved lower.  The Mortgage Bankers Association weekly purchase activity index rose 0.1% last week, while the refinancing activity index surged by 9.4%.  Average reported 30-year fixed rates fell to 4.05%, not including fees.  Results from today's 10-year Treasury auction will be released at 1:00 PM.

Daily Market Update 2/6/12

Mortgage rates held steady Monday after inching higher last Friday on a stronger than expected Employment Report.  The economy added 243,000 jobs in January, while the Unemployment Rate dropped to 8.3%.  Trading has been quiet this morning.  No key data will be released today.

Daily Market Update 2/2/12

Rates inched lower Thursday ahead of tomorrow's Employment Report for January.  This morning, weekly Jobless Claims fell to 367,000, close to expectations.  Productivity rose by 0.7%.  Fed Chairman Ben Bernanke told members of the House Budget Committee that federal budget deficits are "unsustainable", and that "increasing level of government debt relative to national income runs the risk of serious economic consequences".  Really?  No other key data will be released today.

Daily Market Update 2/1/12

Mortgage rates were little changed Wednesday in quiet trading.  In economic news, payroll firm ADP estimated private sector job growth of 170,000 in January, in line with forecast.  Construction Spending rose by 1.5%, beating estimates.  The Institute for Supply Management manufacturing index came in at 54.1, below expectations.  President Obama is expected to announce details of a new government refinance proposal today, to be administered by the Federal Housing Administration (FHA).  The plan will require Congressional approval, which seems unlikely due to concerns about the current financial health of the FHA and potential costs to taxpayers.