Daily Market Update 6/27/12

Mortgage rates remained virtually unchanged Wednesday as investors showed little reaction to stronger than expected economic data.  Durable Goods Orders rose 1.1% in May, above the consensus forecast of 0.5%.  The May Pending Homes Sales index jumped 5.9%, offering further hope of stabilization in the housing market.  The Mortgage Bankers Association weekly purchase activity index fell 1.4%, while the refinancing activity index declined 8.3%.  Average reported 30-year fixed rates increased slightly to 3.88%.  Investors are now focused on the EU Summit taking place tomorrow and Friday.  Results from today's 5-year Treasury auction will be released at 1:00 PM.

Daily Market Update 6/26/12

Rates were little changed Tuesday.  This morning, mortgage-backed securities gave back some of yesterday's gains.  Consumer Confidence fell to 62.0, a five-month low.  The Case-Shiller 20-city home price index was 1.9% lower than one year ago.  Results from today's 2-year Treasury auction will be released at 1:00 PM.

Daily Market Update 6/25/12

Mortgage rates held steady Monday at near-record low levels.  In economic news, New Home Sales jumped by 7.6% in May to 369,000 annual units, beating expectations.  Stocks moved lower on concerns about the pace of global economic growth.  The Supreme Court is expected to rule on the legality of certain provisions of the Affordable Care Act this week, which may cause increased volatility in financial markets.  No other key data is expected today.

Daily Market Update 6/22/12

Mortgage rates held steady Friday in quiet trading, with no key economic data scheduled for release.  Yesterday, ratings agency Moody's downgraded the credit ratings of 15 major international banks, including several of the largest U.S. banks.  Investors showed little reaction to the news, which had been expected.  Next week, Durable Good Orders will be released on Wednesday and the Core PCE price index on Friday.  Also, the Treasury will auction 2-, 5-, and 7-year notes over three days beginning Tuesday.  The main focus of investors is likely to be the EU Summit, which begins next Friday.

Daily Market Update 6/21/12

Rates were little changed Thursday after mortgage-backed securities rebounded from yesterday's losses.  In economic news, weekly Jobless Claims came in at 387,000, above the forecast of 380,000.  The four-week average rose to the highest level since December.  The Philly Fed index, a survey of manufacturing activity in the region, fell to -16.6, far below expectations.  Readings below zero indicate contraction in the manufacturing sector.  Leading Indicators rose by 0.3%, slightly better than expected, while Existing Home Sales came in at an annual rate of 4.55 million, matching the consensus forecast.  No other key data will be released today.

Daily Market Update 6/20/12

Rates faced upward pressure Wednesday ahead of this afternoon's Fed announcement.  The Fed is expected to signal support for further easing of monetary policy, although there is wide disagreement over what actions the Fed will take.  The most likely action is an extension of the "Operations Twist" program, which involves selling short-term Treasuries and buying long-term Treasuries to push down long-term rates.  This program carries little inflation risk, but may have limited impact on the economy.  A much bigger step would be to announce a third round of quantitative easing (QE3), although the inflation risk would be considerably greater.  Rates may remain volatile throughout the day.

Daily Market Update 6/19/12

Mortgage rates were little changed Tuesday in quiet trading.  May Housing Starts fell 5% to an annual rate of 708,000 units, below expectations.  Meanwhile, Building Permits rose 8% to 780,000 units, the highest level since September 2008.  Stocks moved higher.  The Fed begins a two-day FOMC meeting today and will release its monetary policy statement tomorrow at 12:30 PM.  No other data will be released today.

Daily Market Update 6/18/12

Rates held steady Monday following the highly anticipated Greek elections.  Investors showed little reaction to the conservative party victory, which supports austerity measures and the EU bailout.  The consensus view is that essentially nothing changed.  While a victory by the radical leftist party would have likely had a negative outcome for the EU, the conservative party's win does not provide any fresh solutions to the problems.  No key economic data will be released today.

Daily Market Update 6/15/12

Mortgage rates edged lower Friday on increased expectations for additional monetary stimulus.  The Bank of England announced that it will flood its banking system with cheap funds in an attempt to boost economic growth and provide liquidity.  Spanish bond yields rose to record high levels.  Today's economic data in the U.S. came in below expectations.  May Industrial Production decreased slightly.  The Empire State index fell from 17.1 to 2.3, far below forecast.  Readings above zero indicate expansion in the manufacturing sector for the region.  Consumer Sentiment declined to a six-month low.  Rates may be volatile next week following this weekend's elections in Greece.  Also next week, the Federal Open Market Committee (FOMC) of the Federal Reserve will meet for two days beginning Tuesday to discuss monetary policy.  The Fed will issue a statement on Wednesday afternoon.  No other key data will be released today.

Daily Market Update 6/14/12

Mortgage rates were little changed Thursday in quiet trading.  In economic news, the May Consumer Price Index (CPI) declined 0.2% from April, and was 1.7% higher than one year ago.  Core CPI, excluding food and energy components, increased 0.2%, matching expectations, and was 2.3% higher year-over-year.  Weekly Jobless Claims rose to 386,000, above forecast.  Results from today's 30-year Treasury auction will be released at 1:00 PM.

Daily Market Update 6/13/12

Rates held steady Wednesday as concerns about Europe and relatively weak economic data helped mortgage-backed securities recover from yesterday's late sell off.  The May Producer Price Index (PPI) declined 1.0%, a bit more than expected, led by lower energy prices.  Core PPI, which excludes food and energy components, rose 0.2%, matching forecast.  Retail Sales fell 0.2%, in line with expectations.  Stocks moved lower.  The Mortgage Bankers Association weekly purchase activity index rose 12.8%, while the refinancing activity index jumped 19.2%.  Average reported 30-year fixed rates edged higher, to 3.88%, not including fees.  Results from today's 10-year Treasury auction will be released at 1:00 PM.

Daily Market Update 6/11/12

Rates inched higher Monday reflecting market activity late Friday.  This weekend, the European Union (EU) reached a $125 billion bailout plan for Spanish banks.  While the deal will ease short-term risk, it may have little long-term benefit.  Stocks moved higher.  No key economic data will be released today.

Daily Market Update 6/8/12

Mortgage rates inched lower Friday following a late rally in mortgage-backed securities on Thursday.  In economic news, the May Trade Balance declined slightly to $50.1 billion, in line with expectations.  Next week, the Producer Price Index and Retail Sales figures will be released on Wednesday, the Consumer Price Index on Thursday, and Industrial Production on Friday.  Also next week, the Treasury will hold auctions of 3-, 10-, and 30-year notes over three days, beginning Tuesday.  No other key data will be released today.

Daily Market Update

Mortgage rates inched higher Thursday morning, although mortgage-backed securities rallied following comments from Fed Chairman Ben Bernanke.  Speaking before the Joint Economic Committee in Washington, DC, Bernanke provided no specific commitment of Fed easing, but indicated the Fed is "prepared to take action...in the event that financial stresses escalate".  This morning, weekly Jobless Claims fell to 377,000, a bit below forecast.  Mortgage giant Freddie Mac reported average 30-year fixed rates hit another record low last week at 3.67% with 0.7 "points".  In a surprise move, China announced its first rate cut since 2008 in an effort to boost economic growth.  No other data will be released today.

Daily Market Update 6/4/12

Rates were little changed Monday, remaining near record lows.  This morning, the Commerce Department reported that April Factory Orders declined unexpectedly by 0.6%.  An increase of 0.1% had been forecast.  Friday's weaker than expected Employment Report increased concerns about the pace of global economic growth and raised investor expectations for additional quantitative easing by the Fed.  No other key data will be released today.

Daily Market Update 6/1/12

Disappointing economic data pushed mortgage rates to new lows on Friday.  This morning, the Employment Report showed just 69,000 net jobs created in May, while the Unemployment Rate rose to 8.2%.  Average Hourly Earnings, a proxy for wage growth, increased slightly.  April Personal Income fell short of forecast.  The April Core PCE price index, the Fed's preferred measure of inflation, rose at a 1.9% annual rate, a bit less than expected.  The Institute for Supply Management manufacturing index declined to 53.5, below expectations.  Stocks moved sharply lower.  No other key data will be released today.