Daily Market Update 5/31/13

Rates faced upward pressure Friday in extremely volatile trading following the release of mixed economic data.  This morning, April Personal Income was unchanged from March.  An increase of 0.1% had been expected.  The Core PCE price index, the Fed's preferred measure of inflation, was flat last month, and was a tame 2.0% higher than one year ago.  Mortgage-backed securities prices initially moved higher, but fell sharply when the Chicago Purchasing Managers Index jumped to 58.7, far above forecast.  Readings greater than 50.0 indicate expansion in manufacturing in the Midwest Region.  Consumer Sentiment rounded out the day's economic news, rising to 84.5, a six-year high.  Mortgage rates rose 1/4% for the week and 5/8% for the month, reaching their highest levels in more than a year.  Next week's big news will be Friday's Employment Report for May.  No other key data will be released today.

Daily Market Update 5/30/13

Mortgage rates were little changed Thursday following the release of weaker than expected economic data.  This morning, weekly Jobless Claims rose to 354,000, above the consensus forecast of 340,000.  First quarter GDP was revised slightly lower to 2.4%.  Pending Home Sales increased by 0.3%, a bit below expectations.  Results from today's 7-year Treasury auction will be released at 1:00 PM.

Daily Market Update 5/28/13

Mortgage rates continued their upward trend Tuesday following the release of stronger than expected economic data.  This morning, the March S&P/Case-Shiller 20-city home price index rose 1.4% and was 10.9% higher than one year ago.  Consumer Confidence jumped to 76.2, well above forecast, to the highest level since February 2008.  Stocks surged, hurting mortgage-backed securities.  Conventional 30-year fixed rates have now risen by 1/2% in the past three weeks.  Results from today's 2-year Treasury auction will be released at 1:00 PM.

Daily Market Update 5/24/13

Mortgage rates held steady Friday, having increased by about 1/4% for the week.  In economic news, Durable Goods Orders jumped 3.3% in April, easily beating forecast.  No other key data will be released today.  The mortgage-backed securities market will close at 2:00 PM in observance of Memorial Day.

Daily Market Update 5/23/13

Mortgage rates were little changed Thursday after moving higher on Wednesday.  Yesterday, in testimony before Congress, Fed Chairman Ben Bernanke said that it's possible the Fed could taper its purchases of mortgage-backed securities (MBS) at one of its "next few meetings" based on economic conditions.  According to Bernanke, the main requirement for reducing monetary stimulus is "sustainable" improvement in the labor market.  Many investors were surprised by this, and MBS markets sold off sharply.  Later, the Fed released minutes from the May 1 FOMC meeting which suggested wide disagreement among Committee members about the timing of Fed tapering of its purchases of Treasurys and MBS, also known as Quantitative Easing.  This morning mortgage rates hit their highest mark in over a year.

In economic news, weekly Jobless Claims fell to 340,000, a bit below forecast.  New Home Sales rose by 2.3% to 454,000 annual units, beating expectations.  Stocks moved lower.  Financial markets remain extremely volatile.  No other key data will be released today.

Daily Market Update 5/20/13

Mortgage rates were little changed Monday after reaching two-month highs on Friday.  No key economic data will be released today.

Daily Market Update 5/17/13

Rates faced upward pressure Friday following the release of stronger than expected economic data.  Leading Indicators rose 0.6%, beating the consensus of 0.3%.  Consumer Sentiment jumped to 83.7, far exceeding forecast, to the highest level since July 2007.  Stocks rallied, hurting mortgage-backed securities.  No other key data will be released today.

Daily Market Update 5/16/13

Mortgage rates ticked lower Thursday following the release of weaker than expected economic data.  This morning, weekly Jobless Claims jumped to 360,000, the highest level in six weeks, reversing a recent trend lower.  The April Consumer Price Index (CPI) fell 0.4%, below the consensus of -0.3%, and was a tame 1.1% higher than one year ago.  Core CPI, which excludes volatile food and energy components, increased 0.1%, a bit below expectations.  April Housing Starts declined 17% to 853,000 annual units, far below forecast, however Building Permits rose by 14%, much higher than expected.  The Philly Fed index, a survey of manufacturers in the region, came in at -5.2.  Readings below zero indicate contraction in the manufacturing sector.  No other key data will be released today.

Daily Market Update 5/15/13

Rates inched higher Wednesday following yesterday's sharp sell-off of mortgage-backed securities (MBS), although MBS recovered some of their losses this morning.  In economic news, April Industrial Production fell 0.5%, below the consensus forecast of -0.2%.  The Empire State Index declined by 1.4%.  An increase of 3.5% had been expected.  The Producer Price Index (PPI) fell 0.7% in April and was a tame 0.6% higher than one year ago.  Core PPI, which excludes volatile food and energy components, rose 0.1% and increased 1.7% year-over-year.  No other key data will be released today.

Daily Market Update 5/14/13

Rates were little changed Tuesday in volatile trading.  April Import Prices declined by 0.5%, matching forecast.  Stocks moved higher.  No other key data will be released today.

Daily Market Update 5/10/13

Rates inched higher Friday following relatively weak demand for long-term Treasurys at this week's auctions.  No key economic data will be released today.  Next week, Retail Sales figures come out on Monday, the Producer Price Index on Wednesday, and the Consumer Price Index on Thursday.

Daily Market Update 5/9/13

Rates faced upward pressure Thursday following the release of stronger than expected employment data.  Weekly Jobless Claims fell to 323,000, well below the consensus forecast of 335,000, to the lowest level since January 2008.  The reduction in Jobless Claims seen over the past three weeks signals that companies are slowing the pace of layoffs.  Results from today's 30-year Treasury auction will be released at 1:00 PM.

Daily Market Update 5/8/13

Mortgage rates have remained largely unchanged all week in quiet trading following last week's market volatility.  No key economic data is due out until next Monday.  Results from today's 10-year Treasury auction will be released at 1:00 PM.

Daily Market Update 5/3/13

Mortgage rates moved higher Friday as stocks jumped following the release of stronger than expected employment data.  The economy added 165,000 jobs in April, beating forecast, and the figures for February and March were revised higher by 114,000.  The Unemployment Rate fell unexpectedly to 7.5%.  Average Hourly Earnings, a proxy for wage growth, rose 0.2% last month, in line with expectations.  In other news, the Institute for Supply Management services index came in at 53.1, slightly below the consensus forecast, and Factory Orders fell by 4.0%.  A decrease of 3.0% had been expected.  No other key data will be released today.

Daily Market Update 5/2/13

Mortgage rates were little changed Thursday in spite of better than expected economic news.  Weekly Jobless Claims fell to 324,000, the lowest level since January 2008.  The March Trade Deficit declined to $38.8 billion, far below the consensus forecast of $43 billion.  Fourth quarter Productivity came in at 0.7%, below expectations.  Yesterday's Fed statement was uneventful.  The Fed will continue purchases of $85 billion per month of Treasurys and mortgage-backed securities until the labor market improves "substantially".  The only change from its last statement was the addition that the Fed is "prepared to increase or reduce" the pace of asset purchases based on changes in its outlook for the labor market and inflation.  No other key data will be released today.

Daily Market Update 5/1/13

Rates inched lower Wednesday following the release of weaker than expected economic data.  This morning, payroll firm ADP forecast private sector job growth of 119,000 in April, far below the consensus of 155,000.  The Institute for Supply Management manufacturing index fell to 50.7.  Readings above 50.0 indicate expansion in the manufacturing sector of the economy.  Construction Spending declined by 1.7%.  An increase of 0.5% had been expected.  The Fed wraps up its two day FOMC meeting to discuss monetary policy this afternoon and will make an announcement at 2:00 PM.  No rate changes are expected, but investors will be looking for the latest news on the Fed's view of the labor market and the "Quantitative Easing" bond buying program.