Daily Market Update 6/9/09

Mortgage rates held steady Tuesday following Monday's sell-off in mortgage-backed securities. Investor sentiment shifted in the wake of last Friday's stronger than expected Employment Report. Many investors now believe the Fed need to will raise rates later this year to begin curbing inflation. Treasury Secretary Timothy Geithner testifies today at a budget hearing on Capitol Hill. The Treasury will auction 3-year notes this afternoon at 1:00 PM et. No major economic data will be released today.

Daily Market Update 6/8/09

Mortgage rates inched higher Monday as inflation fears continued growing. The Chicago Board of Trade reported investors are now estimating a 36% chance the Fed will raise rates by September in an effort to curb inflation, up from 15% one week ago. This will be a relatively light week in terms of new economic data with the exception of Retail Sales figures on Thursday. Investors are likely to focus on the results of the 10- and 30-year Treasury auctions taking place Wednesday and Thursday. Stocks moved lower, the dollar higher.

Daily Market Update 6/5/09

Interest rates rose sharply Friday following the Non-farm Payrolls report for May. The U.S. economy lost 345,000 jobs for the month, far below consensus forecast of -525,000. The Unemployment Rate jumped to 9.4%, the highest level in 25 years. Mortgage rates have risen by about 3/4% in the past two weeks, largely due to debt supply concerns. Investors in Treasurys and mortgage-backed securities have become increasingly nervous about the massive budget deficits and apparent lack of fiscal discipline of the Federal government. Reports surfaced this week by analysts saying that China and other foreign investors are choosing to invest in shorter-term US bonds rather than longer-term bonds due to growing fears of future inflation stemming from current economic policies. The Treasury will auction $65 billion in 3-, 10-, and 30-year notes next week. Retail Sales figures for May will be released Thursday.

Daily Market Update 6/4/09

Mortgage rates inched higher Thursday as the number of people filing unemployment insurance declined for the first time in five months. Weekly Jobless Claims fell to 621,000, in line with expectations. First quarter Productivity was revised higher to +1.6%, above consensus forecast of +1.2%. Unit Labor Costs, a measure of inflation, rose 3.0% in the first quarter. The European Central Bank (ECB) and Bank of England (BOE) both held rates steady, as expected. Stocks moved modestly higher. Non-farm Payrolls and the Unemployment Rate for May will be released tomorrow at 8:30 AM et.

Daily Market Update 6/3/09

Mortgage rates held steady Wednesday. In economic news, Factory Orders rose 0.7% last month, exceeding forecast and reversing a 0.9% decline in April. The Institute for Supply Management services index contracted at a slower pace in May, but fell short of expectations. Federal Reserve Chairman Ben Bernanke testified on Capitol Hill this morning, saying, "In recent weeks, yields of longer-term Treasury securities and fixed-rate mortgages have risen. These increases appear to reflect concerns about large federal deficits but also other causes, including greater optimism about the economic outlook, a reversal of flight-to-quality flows and technical factors related to the hedging of mortgage holdings." On the matter of budget deficits, Bernanke said, "Maintaining the confidence of the financial markets requires that we, as a nation, begin planning now for the restoration of fiscal balance." The Congressional Budget Office projects the deficit to reach $1.85 trillion this year, four times the previous high. Stocks moved lower. No other economic data will be released today.

Daily Market Update 6/2/09

Mortgage rates were little changed Tuesday following Monday's sell-off of Treasurys and mortgage-backed securities, although it has been a volatile session. The National Association of Realtors reported a 6.7% rise in Pending Home Sales in April, following a 3.2% gain in March. While nearly half of reported sales were "distressed" properties, many analysts view the results as evidence the housing market has reached bottom. Stocks moved modestly higher. No other economic data will be released today.

Daily Market Update 6/1/09

Interest rates rose again Monday as stocks rallied on fresh economic data indicating the economy has begun to stabilize. Personal Income rose 0.5% last month, beating consensus forecast of -0.2. Construction Spending increased 0.8% in April. A decline of 1.8% had been expected. The Institute for Supply Management reported the smallest contraction in U.S. manufacturing in 8 months. Mortgage-backed securities are likely to remain volatile throughout the week ahead of this Friday's Non-farm Payrolls report for May.