Mortgage Rates

Anthony Hood
Equity Investment Capital
Office: 949-891-0067
Email: tony@equityinvestmentcapital.com
website: http://www.equityinvestmentcapital.com/

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Saturday, February 19, 2011

This Week; all markets closed on Monday for President's Day. The week has two housing reports, existing and new home sales, Jan durable goods orders and the weekly jobless claims as the main data points. Treasury will auction $99B of notes; Tuesday $35B of 2 yrs, Wednesday $35B of 5 yrs and Thursday $29B of yr notes totaling $99B the same as the past four months.

The economy based on recent data continues to improve, all but employment and housing. Inflation concerns are slowly mounting as global inflation ticks higher. No inflation in the US so far but investors in long term treasuries and other fixed income investments are not likely to sit and wait for confirmation, a major pressure on long term rates. Both the improving economy and inflation concerns however are being overlooked to some extent with increasing violence and protests spreading across the Mideast. After Tunisia and Egypt over through their rulers people in most of the region are taking to the streets. Safety moves into US treasuries are countering inflation worries and strengthening economic data points.

Technically, the rate markets continue to be bearish, however the patterns are less so now than a week ago. The near term outlook has shifted to solid bearish reads to more neutral patterns. This week both existing and new home sales in Jan are expected to have declined from Dec but whatever slippage we see will likely be seen as weather related distortions.