Daily Market Update 5/29/09

Mortgage rates were little changed Friday, although 30-year fixed rates rose about 1/2% for the week. Investors shrugged off new economic data and focused instead on the rising budget deficit and increased borrowing needs of the Federal Government. The risk of higher inflation in coming years threatens to limit the Fed's ability to hold down long term interest rates to stimulate the economy. In economic news, the Chicago Purchasing Managers Index fell unexpectedly last month, showing a continued decline in business activity. First quarter GDP was revised to -5.7%, a bit worse than forecast. Consumer Sentiment increased slightly. Crude oil prices hit a six month high at $66 per barrel. The closely watched Non-farm Payrolls report for May will be released next Friday. Mortgage-backed securities may remain volatile through the week.

Daily Market Update 5/28/09

Mortgage rates spiked higher yesterday afternoon as investors became increasingly concerned that the government's approach to stimulating the economy would lead to inflation. The U.S. government will need to sell nearly $2 trillion in Treasury bonds this year to fund the massive Federal budget deficit. Rates reached their highest levels since November, complicating efforts by the Fed to revive the real estate market by keeping borrowing costs low. In economic news, New Home Sales rose 0.3% in April, less than expected. Durable Goods Orders increased 1.9% last month, beating forecast. Weekly Jobless Claims came in close to expectations. The mortgage-backed securities market showed little immediate reaction to the data. Stocks moved lower. Today's session is likely to remain highly volatile.

Daily Market Update 5/27/09

Mortgage rates moved higher Wednesday as investors sold mortgage-backed securities ahead of today's Treasury auction of 5-year notes and tomorrow's auction of 7-year notes. In economic news, Existing Home Sales rose 2.9% in April, beating forecast. The national median price fell 15.4% from a year earlier, as distressed properties accounted for 45% of all sales. Stocks were mixed. Durable Goods Orders and New Home Sales data will be released Thursday.

Daily Market Update 5/26/09

Mortgage rates were little changed Tuesday as Consumer Confidence rose to its highest level in nine months. Several key economic reports are due out this week including New and Existing Home Sales, Durable Goods Orders, Chicago Purchasing Managers Index and the ISM manufacturing index. In addition, the Treasury will auction $101 billion of 2-, 5-, and 7-year notes over the next three days. The mortgage-backed securities market may be volatile through the week.

Daily Market Update 5/22/09

Interest rates rose Friday following a late sell-off in Treasurys and mortgage-backed securities (MBS) Thursday. Treasurys have been hit especially hard this week, with the yield on the 10-year note reaching 3.4% this morning, the highest level since November 19. Yesterday the Treasury announced plans to auction $101 billion in 2-, 5-, and 7-year notes next week, in addition to $61 billion in 6-week and 3-month notes. The extraordinarily large auctions are needed to finance this year's projected federal budget deficit of $1.84 trillion. Rates have risen as investors have become increasingly concerned about the high level of government debt. MBS markets have out-performed Treasurys, but mortgage rates inched higher for the week. The dollar fell against most major currencies. Stocks were mixed. The market will close today at 2:00 PM and will not reopen until Tuesday.

Daily Market Update 5/21/09

Mortgage rates were little changed Thursday as stocks fell sharply. Weekly Jobless Claims were reported at 631,000, close to consensus forecast. Leading Indicators rose 1.0% last month, beating expectations. Freddie Mac reported average conventional 30-year fixed rates of 4.82% with 0.6 points for the past week. The mortgage-backed securities market will close tomorrow at 2:00 PM for the Memorial Day Holiday.

Daily Market Update 5/20/09

Mortgage rates held steady Wednesday as stocks rallied. In spite of lackluster data, investors have become increasingly optimistic about the overall direction of the economy in recent weeks. Oil prices rose above $60 per barrel, the dollar fell against the euro. The Fed will release minutes from last month's FOMC meeting today at 2:00 PM et. No surprises are expected.