Daily Market Update 8/31/09

Rates were little changed Monday as investors showed little reaction to a better-than-expected Chicago Purchasing Managers Index. The Chicago PMI national manufacturing index came in at 50.0, the dividing line between contraction and expansion. This may be a volatile week for mortgage-backed securities (MBS), with tomorrow's release of the Institute for Supply Management manufacturing index, Wednesday's release of the minutes from last month's Federal Open Market Committee meeting, and Friday's Non-farm Payrolls report for August. Any reaction to Friday's employment data will be exaggerated due to an early market closing and light trading ahead of the Labor Day weekend. No other data will be released today.

Daily Market Update 8/27/09

Mortgage rates remained little changed Thursday as today's economic data came in close to expectations. Weekly Jobless Claims came in at 570,000, while the 4-week moving average fell slightly to 566,000. Second quarter GDP was unchanged from last month's estimate of -1.0%, beating forecast. Stocks moved lower after the FDIC added 111 lenders to its list of "problem banks", pushing the total to 416, a 15-year high. Oil prices dipped below $70 per barrel on increased inventories. The Treasury will hold an auction of 7-year notes this afternoon at 1:00 PM.

Daily Market Update 8/26/09

Mortgage rates were little changed Wednesday. July Durable Goods Orders rose 4.9%, higher than the consensus forecast of 3.2%, however the most closely watched components fell slightly. New Home Sales surged 9.6% in July to the highest level in 10 months, providing further evidence the housing market has begun to stabilize. There will be a 5-year Treasury auction at 1:00 PM.

Daily Market Update 8/24/09

Mortgage rates were little changed Tuesday following this morning's announcement that the Obama Administration will reappoint Ben Bernanke to a second term as Chairman of the Federal Reserve. The White House also increased its estimated budget deficit for the next ten years to $9.05 trillion, roughly $2 trillion more than estimates earlier this year, and in line with projected figures from the Congressional Budget Office. In economic news, the Case-Shiller Home Price Index rose 3% in the second quarter from the first quarter, the first increase in three years. Consumer Confidence rose for the first time in three months, beating forecast. The Treasury will hold an auction of 2-year notes this afternoon.

Daily Market Update 8/24/09

Rates held steady Monday after having risen late Friday. Stronger than expected Existing Home Sales and a relatively upbeat assessment of the economy by Fed Chairman Ben Bernanke pushed stock prices higher and hurt mortgage-backed securities prices last week. No economic data will be released today. The Treasury will begin a large three-day auction tomorrow.

Daily Market Update 8/21/09

Mortgage rates came under upward pressure Friday following a National Association of Realtors report showing July Existing Home Sales rose 7.2%, far above forecast. The annual pace of 5.24 million units was the highest level since August 2007. The housing market has been boosted by sales of foreclosed properties, historically low interest rates, and the $8,000 first-time homebuyer tax credit. Stocks surged, hurting mortgage-backed securities markets. Key economic data due out next week include Durable Goods Orders on Wednesday and revised second quarter GDP figures Thursday. The Treasury will hold record auctions of 2-, 5-, and 7-year notes beginning Tuesday.

Daily Market Update 8/20/09

Mortgage rates held steady Thursday following the release of mixed economic data. Weekly Jobless Claims rose unexpectedly to 576,000, above the consensus forecast of 550,000. Leading indicators rose 0.6%, close to expectations. The Philly Fed index, which measures manufacturing growth in the Philadelphia region, showed expansion for the first time this year. Most analysts had anticipated a decline. The Treasury will announce its funding needs for the next two quarters at 11:00 AM. Investors will be watching closely, as an increased supply of debt may pressure interest rates.