Daily Market Update 1/31/13

Mortgage rates were little changed Thursday in volatile trading following the release of mixed economic data.  Weekly Jobless Claims jumped to 368,000, well above the consensus forecast of 350,000.  Personal Income rose 2.6%, beating expectations.  Abnormally large year-end bonus payments ahead of higher 2013 tax rates accounted for much of the increase.  December Core PCE price index, the Fed's preferred measure of inflation, was unchanged from November, and was a tame 1.4% higher than one year ago.  The Chicago Purchasing Managers Index rose to 55.6, much higher than expected.  Readings above 50.0 indicate expansion in the manufacturing sector in the Midwest region.  No other key economic data will be released today.  The closely-watched Employment Report for January will come out tomorrow at 8:30 AM.

Daily Market Update 1/30/13

Rates moved higher Wednesday ahead of this afternoon's Fed statement.  The Federal Open Market Committee wraps up a two day meeting to discuss monetary policy today at 2:15 PM.  Investors will be looking for indications of how much longer the Fed will continue to purchase Treasurys and mortgage-backed securities (MBS).  Any change from the statement in December could have a large impact on MBS prices.  In economic news, fourth quarter GDP declined unexpectedly by 0.1%, far below forecast.  The weakness came mostly from government spending and inventories, while both business and consumer spending were relatively strong.  Separately, payroll firm ADP projected private sector job growth of 192,000 in December, a bit higher than expected.  The Mortgage Bankers Association weekly purchase activity index fell by 1.8%, while the refinancing activity index declined by 10.2%.  Average reported 30-year fixed rates rose to 3.67%, not including fees.  Results from today's 7-year Treasury auction will be released at 1:00 PM.

Daily Market Update 1/28/13

Mortgage rates moved higher Monday in extremely volatile trading.  30-year fixed rates have now risen by about 1/4% over the past 10 days.  10-year Treasury yields reached 2.0% for the first time since last April.  In economic news, Durable Goods Orders rose 4.6%, far above the consensus forecast of +2.0%.  Pending Home Sales fell 4.3% in December, largely due to a lack of inventory.  Investors have now turned their focus to the two day Federal Open Market Committee (FOMC) meeting of the Fed which wraps up Wednesday afternoon, and Friday's release of the Employment Report for January, the most closely watched economic data of the month.  Results of today's 2-year Treasury auction will be released at 1:00 PM.

Daily Market Update 1/24/13

Rates faced upward pressure Thursday as stronger than expected employment data boosted stocks and hurt mortgage-backed securities.  Weekly Jobless Claims fell to 330,000, well below forecast, to the lowest level in five years.  Leading Indicators rose 0.5%, in line with expectations.  No other key data will be released today.

Daily Market Update 1/23/13

Mortgage rates inched lower Wednesday.  The main focus will be on the House vote to suspend the debt ceiling until May 19.  Investors will be trying to determine if the two parties are more willing to work together to reach a compromise on deficit reduction.  No key economic data will be released today.

Daily Market Update 1/22/13

Mortgage rates were virtually unchanged Monday.  In economic news, Existing Home Sales fell unexpectedly to 4.94 million annual units.  An increase to 5.10 million had been forecast.  Stocks were mixed.  No other key data will be released today.

Daily Market Update 1/18/13

Mortgage rates were little changed Friday after moving higher on Thursday.  Consumer Sentiment fell unexpectedly to 71.3.  An increase to 75.0 had been forecast.  No major economic data will be released next week, although we will get a look at housing figures, with Existing Home Sales coming out on Tuesday and New Home Sales on Friday.

Daily Market Update 1/17/13

Rates inched higher Thursday as stronger than expected economic data boosted stocks and hurt mortgage-backed securities.  This morning, weekly Jobless Claims fell to 335,000, far below forecast, to the lowest level in five years.  December Housing Starts jumped 12% to 954,000 annual units, easily beating expectations.  The Philadelphia Fed index, a survey of manufacturers in the region, declined unexpectedly to -5.8.  Readings below zero indicate contraction in the manufacturing sector.  No other key data will be released today.

Daily Market Update 1/15/13

Mortgage rates were little changed Tuesday following the release of mixed economic data.  December Retail Sales jumped 0.5% led by increased auto sales, beating expectations.  The Producer Price Index (PPI) fell 0.2%, below the consensus of -0.1%, and was 1.3% higher than one year ago.  Core PPI, which excludes volatile food and energy components, rose 0.1%, and was a tame 2.0% higher year-over-year.  The Empire State Index, a survey of manufacturing activity in the region, came in a -7.8, well below forecast.  Readings below zero indicate contraction in the manufacturing sector.  Stocks moved lower.  No other key data will be released today.

Daily Market Update 1/14/13

Mortgage rates inched lower Monday on reports that Japan is considering a new program to purchase foreign bonds in an attempt to weaken the value of the Yen relative to other currencies.  No key economic data will be released today.

Daily Market Update 1/11/13

Mortgage rates held steady Friday, with little net change for the week.  This morning, December Import Prices fell 0.1%, compared to a consensus forecast of +0.1%.  The November Trade Deficit rose to $48.7 billion, exceeding expectations.  Stocks moved lower.  Key economic news next week includes Tuesday's release of Retail Sales and the Producer Price Index for December.  The Consumer Price Index comes out on Wednesday.  No other key data will be released today.

Daily Market Update 1/10/13

Rates inched higher Thursday as stronger than expected economic data in China hurt mortgage-backed securities.  This morning, the European Central Bank (ECB) made no change in rates, as expected.  In the U.S., weekly Jobless Claims fell to 371,000, a bit higher than expected.  Results of today's 30-year Treasury auction will be released at 1:00 PM.  In other news, the Consumer Finance Protection Bureau released its much anticipated Qualified Mortgage Rule.  The Rule, which takes effect one year from today, attempts to establish minimum underwriting standards, eliminate certain "risky" loan features, and limit originator compensation.

Daily Market Update 1/9/13

Mortgage rates were little changed Wednesday, although mortgage-backed securities faced some pressure from a rally in stock prices.  Investors are also concerned about the lack of progress in deficit reduction talks.  No key economic data will be released today.  The Mortgage Bankers Association weekly purchase activity index rose 9.6%, while the refinancing activity index jumped 12.1%.  Average reported 30-year fixed rates increased to 3.61%, not including fees, a two month high.  Rates have risen by about 1/4% over the past four weeks.  Results from today's 10-year Treasury auction will be released at 1:00 PM.

Daily Market Update 1/8/13

Mortgage rates edged lower Tuesday as mortgage-backed securities benefited from falling stock prices.  No key economic data will be released today.  Results from today's 3-year Treasury auction will come out at 1:00 PM.

Daily Market Update 1/7/13

Rates held steady Monday in quiet trading.  No key economic data will be released today.  In other mortgage-related news, Bank of America agreed to pay Fannie Mae $3.6 billion to settle home loan repurchase claims and $6.75 billion to repurchase delinquent mortgages with questionable documentation created by Countrywide Home Loans prior to 2008.  Separately, B of A agreed to sell servicing rights on $306 billion in home loans to other servicers.

Daily Market Update 1/4/13

Mortgage rates moved higher Friday reflecting a sharp sell off of mortgage-backed securities (MBS) late Thursday.  Yesterday, unfavorable repricing took place following the release of Minutes from the December 12 FOMC meeting of the Fed showing far less support for continued purchases of Treasurys and MBS than investors had expected.  Several Fed officials thought it would "probably be appropriate to slow or to stop purchases well before the end of 2013".  In short, when the Fed scales back asset purchases, reduced demand is likely to push MBS prices lower, thereby increasing interest rates.  Trading has been extremely volatile since the release.  In economic news this morning, the economy added 155,000 jobs last month, slightly more than expected.  The Unemployment Rate remained at 7.8%.  The Institute for Supply Management services index rose to 56.1, beating forecast.  Readings above 50.0 indicate expansion in the services sector.  Factory Orders were unchanged.  An increase of 0.5% had been expected.  No other key data will be released today.

Daily Market Update 1/3/13

Mortgage rates were little changed Thursday as stock prices moved lower following yesterday's surge.  In economic news, weekly Jobless Claims rose to 372,000, above forecast.  Payroll firm ADP estimated private sector job growth of 215,000 in December, beating expectations.  The Mortgage Bankers Association weekly purchase activity index fell by 10.5%, while the refinancing activity index declined by 10.4%.  Average reported 30-year fixed rates rose to 3.52%, not including fees.  The most closely-watched data of the month, Non-farm Payrolls and the Unemployment Rate, will be released tomorrow at 8:30 AM.

Daily Market Update 1/2/13

Mortgage rates inched higher Wednesday as stocks rallied following last night's deal to avoid the "fiscal cliff".  While much of the debate, including entitlement reform, was simply postponed, investors were relieved that simultaneous tax increases and automatic spending cuts were avoided, at least for now.  In economic news, the Institute for Supply Management manufacturing index rose to 50.7, slightly above forecast.  Construction Spending unexpectedly declined by 0.3%.  Minutes from the December 12 FOMC meeting of the Fed will be released at 2:00 PM.