Mortgage Rates
Prior to 8:15 this morning the 10 yr and mortgage markets were slightly weaker in price. At 8:15 ADP reported its estimate for May private jobs, thought to be up 150K, increased 133K; the average for the first five months this year 123K. Not much reaction to the weaker data. At 8:30 weekly jobless claims were expected to have declined 4K, as reported claims were up 10K to 383K after last week was revised from 370K to 373K. The 4 wk average on claims at 374,500 frm 370,750K; continuing claims at 3.242 mil down frm 3.278 mil as more unemployed lose their benefits. The continuing claims are the lowest since July 2008. Also at 8:30 Q1 preliminary GDP was expected at 1.9% and was as reported and down from +2.2% on the advance report last month; final sales in Q1 +1.7% frm +1.6% on the preliminary report.
Market reaction on the early data took the 10 yr note to 1.60% -0.1% and mortgage prices +5/32 (.15 bp) frm yesterday’s close. Stock indexes still held minor gains on the data but were well off the levels prior to the data. At 9:30 the DJIA opened +15, NASDAQ unch; the 10 yr note +5/32 at 1.60% and MBS 30 yr price +5/32 (.15 bp) frm yesterday’s close. As the day has progressed rates continue to decline (see below)
In Tokyo last night Fed’s Bullard said he doesn’t see the need for more QE frm the Fed. One man’s opinion in a Fed divided. There remains a number of Fedsters that still want another easing. We continue our opinion that the fed will not ease at the June 19-20 meeting, and after that the Fed will hold off as it generally doesn’t want to be seen as political into the Nov elections.
At 9:45 the May Chicago purchasing managers’ index, thought to be at 57.0 frm 56.2, took a big decline to 52.7. The components also weaker than thought; new orders index at 52.9 frm 57.4, the lowest read since Sept 2009, employment component at 57.0 frm 58.7; prices at 60.4 frm 68.6 on the decline of energy prices. Although markets are taking it badly in the stock market, the key indexes still are above 50 and expanding, albeit very slowly and weakening. Europe is having a serious negative impact on the US and global economies as it is clearly in deepening recession dragging the rest of the world along with it. That’s it for scheduled reports today; tomorrow of course is the mother lode with the May BLS employment report; after the data this morning many traders already adjusting to a weaker than thought report.
Spanish and Italian bonds rallied amid speculation the European Central Bank will announce measures to combat the debt crisis when it meets next week. Spanish 10-year bond yields declined from a six-month high today even as ECB President Mario Draghi told a European Union Parliament committee the central bank cannot fill the “vacuum” of the lack of fiscal prudence and governance in the euro area. Policy makers will meet on June 6. Round and round we go with conflicting news from the region.
The safe haven move to US treasuries has moved more toward 30 yr bonds than the 10 yr note as investors are looking for higher yields. The 10 yr note this morning hit a new low at 1.59% for a nanosecond; the 30 yr bond declined 6 bp at 9:30 compared to -1 bp on the 10 yr; the 10 price +4/32 while the 30 yr bond up 25/32. Mortgage markets take their direction from the 10 yr, not the 30 yr. In Germany this morning their 10 yr bund traded at 1.25% compared to 1.60% on the US 10 yr. Mortgage markets not rallying much this morning but prices have improved, at 10:00 the 10 yr note at 1.58% a new record low.
Thursday, May 31, 2012
Wednesday, May 30, 2012
Mortgage Rates
A new record low for the 10 yr note this morning, at 1.67% at 8:30; stock indexes being crushed early on. Mortgage rates also at new record lows. Of course its all about Europe as has been the case now for well over a year; an index of executive and consumer sentiment in the 17-nation euro area fell to 90.6 from a revised 92.9 in April, the European Commission in Brussels said today. That’s the lowest since October 2009 and below the 91.9 forecast by economists. A gauge of sentiment among European manufacturers fell to minus 11.3 from minus 9 in April, today’s report showed. That’s the lowest since February 2010. An indicator of services confidence dropped to minus 4.9 from minus 2.4, while a gauge of consumer sentiment rose to minus 19.3 from minus 19.9. Sentiment in the construction industry also declined this month.
Italy’s bond yields surged to a four-month high as the nation missed its maximum target for sales of five- and 10-year securities. German two- five-, 10- and 30-year government bond yields fell to record lows. Spanish bonds slumped, driving five-year yields to more than 6.0% for the first time since November. The Italian 10-year yield advanced 18 basis points, or 0.18 percentage point, to 5.95 percent early today; the rate reached 6.01% before bouncing, the highest since Jan. 31. German 10-year yields fell five basis points to 1.32% after dropping to 1.304% before a bounce, the least since tracking the data in 1989. German two-year yields slipped to 0.01%, five-year yields declined to 0.383%, while 30-year rates slid to 1.849%, all the least on record for the securities.
About 7:00 am this morning news wires reported the European Commission called for direct euro-area aid for troubled banks and touted common bond issuance as an antidote to the debt crisis now threatening to overwhelm Spain. The current EU plans call for the 500 billion-euro European Stability Mechanism, set to start up in July, to funnel bank-aid money through national governments and, ultimately, require those governments to pay it back. The commission appealed for a “banking union” that would more tightly integrate supervision and create a pool of European funds to clean up banks with cross-border exposure and segregate their underperforming assets. The “new” plan being floated calls for direct loans to troubled banks and not through governments; it is being opposed by Germany however. The German view is that lending to banks directly instead of through governments would lessen the moves to austerity in spending.
All Europe’s stock markets are getting hit hard this morning on increasing lack of confidence in the region and the inability of Italy to sell its debt. Money continues to flow to safety, into German bunds and US treasuries. US interest rates trading higher than German rates; the German 10 yr bund at 1.32% compared to US 10 yr treasury at 1.66% keeping demand high. In China today the government said it won’t inject stimulus at the pace it did in 2008 as its economic growth is expected to decline to +8.2%, also helping drive global rates lower.
Mortgage applications decreased 1.3% from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending May 25, 2012. This week’s results do not include an adjustment for early closings on Friday before the Memorial Day holiday. The Market Composite Index, a measure of mortgage loan application volume, decreased 1.3 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 1.6 percent compared with the previous week. The Refinance Index decreased 1.5 percent from the previous week. The seasonally adjusted Purchase Index decreased 0.6 percent from one week earlier. The unadjusted Purchase Index decreased 1.8 percent compared with the previous week and was 3.9 percent lower than the same week one year ago.
At 9:30, in line with Europe’s markets, the DJIA opened -110, NASDAQ -29. The 10 yr at 9:30 1.66% -9 bp frm yesterday and taking out resistance at 1.70%; MBS 30 yr prices +10/32 (.31 bp).
The only data today; April pending home sales, expected up 0.2%, fell 5.5%; yr/yr sales +14.4%. Pending sales are contracts signed but not closed; cancellations led to the decline as appraisals and credit problems continue to eliminate potential buyers. The stock indexes weakened more and the rate markets improved slightly on the report.
Limbo, Limbo. How low can they go? How bad will things get in Europe’s financial crisis, and how deeply will Europe drive global economies down? The US 10 yr is now technically set to test the next resistance at 1.60%. As long as German 10 yr bunds fall it will drive US rates down with it as US rates continue to trade at higher rates. That said, it is the moving target and completely depends on the deteriorating outlook in the EU’s ability to work out a solution to its debt and growing problems in the banking sectors. Germany is the key; will it step up and take the leap to save the day as it did with east Germany? So far Germany is unwilling to take on the challenge.
A new record low for the 10 yr note this morning, at 1.67% at 8:30; stock indexes being crushed early on. Mortgage rates also at new record lows. Of course its all about Europe as has been the case now for well over a year; an index of executive and consumer sentiment in the 17-nation euro area fell to 90.6 from a revised 92.9 in April, the European Commission in Brussels said today. That’s the lowest since October 2009 and below the 91.9 forecast by economists. A gauge of sentiment among European manufacturers fell to minus 11.3 from minus 9 in April, today’s report showed. That’s the lowest since February 2010. An indicator of services confidence dropped to minus 4.9 from minus 2.4, while a gauge of consumer sentiment rose to minus 19.3 from minus 19.9. Sentiment in the construction industry also declined this month.
Italy’s bond yields surged to a four-month high as the nation missed its maximum target for sales of five- and 10-year securities. German two- five-, 10- and 30-year government bond yields fell to record lows. Spanish bonds slumped, driving five-year yields to more than 6.0% for the first time since November. The Italian 10-year yield advanced 18 basis points, or 0.18 percentage point, to 5.95 percent early today; the rate reached 6.01% before bouncing, the highest since Jan. 31. German 10-year yields fell five basis points to 1.32% after dropping to 1.304% before a bounce, the least since tracking the data in 1989. German two-year yields slipped to 0.01%, five-year yields declined to 0.383%, while 30-year rates slid to 1.849%, all the least on record for the securities.
About 7:00 am this morning news wires reported the European Commission called for direct euro-area aid for troubled banks and touted common bond issuance as an antidote to the debt crisis now threatening to overwhelm Spain. The current EU plans call for the 500 billion-euro European Stability Mechanism, set to start up in July, to funnel bank-aid money through national governments and, ultimately, require those governments to pay it back. The commission appealed for a “banking union” that would more tightly integrate supervision and create a pool of European funds to clean up banks with cross-border exposure and segregate their underperforming assets. The “new” plan being floated calls for direct loans to troubled banks and not through governments; it is being opposed by Germany however. The German view is that lending to banks directly instead of through governments would lessen the moves to austerity in spending.
All Europe’s stock markets are getting hit hard this morning on increasing lack of confidence in the region and the inability of Italy to sell its debt. Money continues to flow to safety, into German bunds and US treasuries. US interest rates trading higher than German rates; the German 10 yr bund at 1.32% compared to US 10 yr treasury at 1.66% keeping demand high. In China today the government said it won’t inject stimulus at the pace it did in 2008 as its economic growth is expected to decline to +8.2%, also helping drive global rates lower.
Mortgage applications decreased 1.3% from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending May 25, 2012. This week’s results do not include an adjustment for early closings on Friday before the Memorial Day holiday. The Market Composite Index, a measure of mortgage loan application volume, decreased 1.3 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 1.6 percent compared with the previous week. The Refinance Index decreased 1.5 percent from the previous week. The seasonally adjusted Purchase Index decreased 0.6 percent from one week earlier. The unadjusted Purchase Index decreased 1.8 percent compared with the previous week and was 3.9 percent lower than the same week one year ago.
At 9:30, in line with Europe’s markets, the DJIA opened -110, NASDAQ -29. The 10 yr at 9:30 1.66% -9 bp frm yesterday and taking out resistance at 1.70%; MBS 30 yr prices +10/32 (.31 bp).
The only data today; April pending home sales, expected up 0.2%, fell 5.5%; yr/yr sales +14.4%. Pending sales are contracts signed but not closed; cancellations led to the decline as appraisals and credit problems continue to eliminate potential buyers. The stock indexes weakened more and the rate markets improved slightly on the report.
Limbo, Limbo. How low can they go? How bad will things get in Europe’s financial crisis, and how deeply will Europe drive global economies down? The US 10 yr is now technically set to test the next resistance at 1.60%. As long as German 10 yr bunds fall it will drive US rates down with it as US rates continue to trade at higher rates. That said, it is the moving target and completely depends on the deteriorating outlook in the EU’s ability to work out a solution to its debt and growing problems in the banking sectors. Germany is the key; will it step up and take the leap to save the day as it did with east Germany? So far Germany is unwilling to take on the challenge.
Tuesday, May 29, 2012
Mortgage Rates
This is employment week, always a big one for the markets. ADP will report its estimate for private jobs in May on Thursday then the BLS reports the “official;” report on Friday. In the meantime Europe still dominates overall, now Spain is taking the spotlight on concerns Spanish banks are teetering on the edge and need capital infusion in some manner in order to remain solvent. It only gets worse in Europe, Greece is increasingly viewed as leaving the EU with the deciding vote in about two weeks (June 17th).
How low can US interest rates fall? Based on comparisons of some other AAA sovereign yields the US 10 yr note is cheap, trading at 1.73% this morning compared to Germany’s 10 yr bund at 1.346%; the spread .385 bp at 9:30. $ yrs and counting, the US budget deficits have exceeded $1.0T with US debt downgraded by rating agencies and no longer AAA. One of the key drivers for US interest rates is there are better yields here than in Germany, Australia and other better controlled countries. The extra yield investors receive for holding Treasuries is an added benefit for investors seeking a haven from Europe’s sovereign debt turmoil. In the US there is absolutely no incentive for politicians to focus on budgets; neither Democrats or republicans, no matter what comes out of their mouths, our politicians have no interest in actually dealing with excess spending regardless of what you may here from any of them.
Home values in 20 U.S. cities fell in the 12 months ended March at the slowest pace in more than a year as lower borrowing costs and an improving job market gave sales a boost. The S&P/Case-Shiller index of property values fell 2.6% from a year earlier after a 3.5% drop in February.
At 9:30 the DJIA opened +83, NASDAQ +25; 10 yr note +3/32 at 1.73% -1 bp and mortgage prices that were slightly better early were unchanged.
At 10:00 May consumer confidence index from the Conference Board, expected at 69.4, was a lot weaker at 64.9 frm rev’d Apr at 68.7 frm 69.2. Expectations at 77.6 frm 80.4, the present situation at 45.9 frm 51.2. The rep[ort on consumers is a lot weaker than what the U. of Michigan consumer sentiment index reported last week. The reaction wasn’t much, the 10 yr note moved up 2/32 in price but the stock market ignored the report.
Probably won’t see much movement in the financial markets through the rest of the day; at least until; 3:00 for the stock market. The final hour in stock trading is generally volatile. The interest rate markets are not likely to improve a whole lot this week until employment on Friday or a significant decline on German 10 yr bunds. Technically the US 10 yr is going to need a large push to move and stay below 1.70%. Mortgage rates are likely to be unchanged through most of this four day week.
This is employment week, always a big one for the markets. ADP will report its estimate for private jobs in May on Thursday then the BLS reports the “official;” report on Friday. In the meantime Europe still dominates overall, now Spain is taking the spotlight on concerns Spanish banks are teetering on the edge and need capital infusion in some manner in order to remain solvent. It only gets worse in Europe, Greece is increasingly viewed as leaving the EU with the deciding vote in about two weeks (June 17th).
How low can US interest rates fall? Based on comparisons of some other AAA sovereign yields the US 10 yr note is cheap, trading at 1.73% this morning compared to Germany’s 10 yr bund at 1.346%; the spread .385 bp at 9:30. $ yrs and counting, the US budget deficits have exceeded $1.0T with US debt downgraded by rating agencies and no longer AAA. One of the key drivers for US interest rates is there are better yields here than in Germany, Australia and other better controlled countries. The extra yield investors receive for holding Treasuries is an added benefit for investors seeking a haven from Europe’s sovereign debt turmoil. In the US there is absolutely no incentive for politicians to focus on budgets; neither Democrats or republicans, no matter what comes out of their mouths, our politicians have no interest in actually dealing with excess spending regardless of what you may here from any of them.
Home values in 20 U.S. cities fell in the 12 months ended March at the slowest pace in more than a year as lower borrowing costs and an improving job market gave sales a boost. The S&P/Case-Shiller index of property values fell 2.6% from a year earlier after a 3.5% drop in February.
At 9:30 the DJIA opened +83, NASDAQ +25; 10 yr note +3/32 at 1.73% -1 bp and mortgage prices that were slightly better early were unchanged.
At 10:00 May consumer confidence index from the Conference Board, expected at 69.4, was a lot weaker at 64.9 frm rev’d Apr at 68.7 frm 69.2. Expectations at 77.6 frm 80.4, the present situation at 45.9 frm 51.2. The rep[ort on consumers is a lot weaker than what the U. of Michigan consumer sentiment index reported last week. The reaction wasn’t much, the 10 yr note moved up 2/32 in price but the stock market ignored the report.
Probably won’t see much movement in the financial markets through the rest of the day; at least until; 3:00 for the stock market. The final hour in stock trading is generally volatile. The interest rate markets are not likely to improve a whole lot this week until employment on Friday or a significant decline on German 10 yr bunds. Technically the US 10 yr is going to need a large push to move and stay below 1.70%. Mortgage rates are likely to be unchanged through most of this four day week.
Friday, May 25, 2012
Mortgage Rates
A little better start this morning but interest rates continue in a narrow range ahead of the 3 day holiday. With US markets closed on Monday and the rest of the world working, the bond and stock market should trade in a tight range with the bond market not likely to see a lot of selling today. The bond and mortgage markets will close at 2:00 this afternoon with most traders out by 12:00.
The US dollar continues to gain strength over the euro on Europe’s debt crisis that isn’t close to any resolution. The euro fell against the dollar and yen for the fourth day amid concern Spain’s regional governments may lose access to capital markets. Spain’s government is analyzing “with all caution” requests from regional governments to help them regain access to capital markets. The Italian prime minister told an Italian television station yesterday that the majority of EU leaders at a Brussels meeting this week backed joint euro-area bonds. He added that Italy can help persuade Germany to support Europe’s “common good” as well. Germany is opposed to euro bonds and has only one thing on its agenda, continue the severe austerity moves that are not working and could well break up the EU unless there is more emphasis on improving economies with increased spending. Euro-area bonds lower borrowing costs for the currency’s most debt-stricken members by making repayment the responsibility of all 17 countries.
At 9:30 the DJIA opened -15, NASDAQ +1; the 10 yr note +10/32 at 1.75% -3 bp and MBS 30 yr price +6/32 (.18 bp).
At 9:55 the final May U. of Michigan consumer sentiment index was expected at 77.5 down from 77.8 two weeks ago at the mid-month sentiment. The index increased to 79.3 the highest reading since Oct 2007 and from the final read at the end of April at 76.4. The current condition at 87.2 frm 87.3 at mid-month, expectations at 74.3 frm 71.7 and the 12 month outlook at 91 frm 88. The better sentiment took the stock indexes off their lows but not into the black; the rate markets didn’t show much reaction to the better sentiment as the improvement is likely due to one thing, the decline in gasoline prices. The report does present volatility.
The rest of the day will be on very light volume and with little changes, The bond and mortgage markets close at 2:00 this afternoon.
A little better start this morning but interest rates continue in a narrow range ahead of the 3 day holiday. With US markets closed on Monday and the rest of the world working, the bond and stock market should trade in a tight range with the bond market not likely to see a lot of selling today. The bond and mortgage markets will close at 2:00 this afternoon with most traders out by 12:00.
The US dollar continues to gain strength over the euro on Europe’s debt crisis that isn’t close to any resolution. The euro fell against the dollar and yen for the fourth day amid concern Spain’s regional governments may lose access to capital markets. Spain’s government is analyzing “with all caution” requests from regional governments to help them regain access to capital markets. The Italian prime minister told an Italian television station yesterday that the majority of EU leaders at a Brussels meeting this week backed joint euro-area bonds. He added that Italy can help persuade Germany to support Europe’s “common good” as well. Germany is opposed to euro bonds and has only one thing on its agenda, continue the severe austerity moves that are not working and could well break up the EU unless there is more emphasis on improving economies with increased spending. Euro-area bonds lower borrowing costs for the currency’s most debt-stricken members by making repayment the responsibility of all 17 countries.
At 9:30 the DJIA opened -15, NASDAQ +1; the 10 yr note +10/32 at 1.75% -3 bp and MBS 30 yr price +6/32 (.18 bp).
At 9:55 the final May U. of Michigan consumer sentiment index was expected at 77.5 down from 77.8 two weeks ago at the mid-month sentiment. The index increased to 79.3 the highest reading since Oct 2007 and from the final read at the end of April at 76.4. The current condition at 87.2 frm 87.3 at mid-month, expectations at 74.3 frm 71.7 and the 12 month outlook at 91 frm 88. The better sentiment took the stock indexes off their lows but not into the black; the rate markets didn’t show much reaction to the better sentiment as the improvement is likely due to one thing, the decline in gasoline prices. The report does present volatility.
The rest of the day will be on very light volume and with little changes, The bond and mortgage markets close at 2:00 this afternoon.
Wednesday, May 23, 2012
Mortgage Rates
Treasuries and mortgage markets opened better this morning on continued concerns that Greece will leave the euro although officials in the region are saying they are not preparing for a Greek exist. Nothing different in terms of various comments out of Europe, some say one thing while others deny. Nevertheless global investors are more convinced Greece will go. Europe’s banks, sitting on $1.19 trillion of debt to Spain, Portugal, Italy and Ireland, are facing a wave of losses if Greece abandons the euro. While lenders have increased capital buffers, written down Greek bonds and used central-bank loans to help refinance units in southern Europe, they remain vulnerable to the contagion that might follow a withdrawal. Even with more than two years of preparation, banks still are at risk of deposit flight and rising defaults in other indebted euro nations. European leaders are meeting today to discuss the region’s debt crisis. Deepening concern Greece will exit the euro has wiped about $4 trillion from equity markets worldwide this month.
European Union officials damped expectations for the 27-nation summit starting at 7 p.m. in Brussels, looking toward the next meeting on June 28-29 as the time to take pro-growth steps. The crisis in the 17 euro countries will come up tonight only “at the very end,” the EU President said in a pre-summit letter.
German interest rates continued to fall today on the Greek situation, the US 10 yr note is lower in yield early today on the same concerns. That said, while there is little reason to expect interest rates will increase, the US 10 yr still has strong resistance at 1.70%, the level that hasn’t been breached on a closing basis. As long as the on-going uncertainty remains the US interest rate markets will remain at these levels; to crack 1.70% on the 10 yr and send mortgage rates to another historic low Greece will have to actually default. IN the meantime officials in Europe will never acquiesce that Greece will leave the EU, always holding out hope that the contagion will not spread to other indebted countries in the region sitting on the brink.
At 9:30 the DJIA opened -55, NASDAQ -24. The 10 yr note traded at 1.74% -4 bp frm yesterday’s close; MBS 30 yr price +5/32 (.15 bp) frm yesterday’s close.
At 10:00 April new home sales were expected up 3.3%; as reported up 3.3% at 343K units annualized, the median sales price $235,700.00 +4.9% yr/yr; based on present sales there is a 5.1 month supply.
The March FHFA housing price index, expected up 0.3%, increased 1.8% and +2.7% yr/yr.
The weekly MBA mortgage applications were up last week. The Market Composite Index, a measure of mortgage loan application volume, increased 3.8% on a seasonally adjusted basis from one week earlier. The Refinance Index increased 5.6% from the previous week. This is the third consecutive weekly increase in the Refinance Index which is at its highest level since February 10, 2012. The seasonally adjusted Purchase Index decreased 3.0% from one week earlier to its lowest level since April 20, 2012. The four week moving average for the seasonally adjusted Market Index is up 3.72 percent. The four week moving average is up 0.17% for the seasonally adjusted Purchase Index, while this average is up 4.83% for the Refinance Index. The refinance share of mortgage activity increased to 76.6% of total applications from 74.9% the previous week. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) decreased to 3.93 percent, the lowest rate in the history of the survey, from 3.96 percent, with points increasing to 0.39 from 0.37 (including the origination fee) for 80% loans. The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,500) increased to 4.25 percent from 4.20 percent, with points increasing to 0.42 from 0.36 (including the origination fee) for 80% loans. The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 3.73 percent, the lowest rate in the history of the survey, from 3.75 percent, with points decreasing to 0.57 from 0.66 (including the origination fee) for 80% loans.
At 1:00 Treasury will auction $35B of 5 yr notes; yesterday’s 2 yr auction saw good demand, likely that will be the same today.
Treasuries and mortgage markets opened better this morning on continued concerns that Greece will leave the euro although officials in the region are saying they are not preparing for a Greek exist. Nothing different in terms of various comments out of Europe, some say one thing while others deny. Nevertheless global investors are more convinced Greece will go. Europe’s banks, sitting on $1.19 trillion of debt to Spain, Portugal, Italy and Ireland, are facing a wave of losses if Greece abandons the euro. While lenders have increased capital buffers, written down Greek bonds and used central-bank loans to help refinance units in southern Europe, they remain vulnerable to the contagion that might follow a withdrawal. Even with more than two years of preparation, banks still are at risk of deposit flight and rising defaults in other indebted euro nations. European leaders are meeting today to discuss the region’s debt crisis. Deepening concern Greece will exit the euro has wiped about $4 trillion from equity markets worldwide this month.
European Union officials damped expectations for the 27-nation summit starting at 7 p.m. in Brussels, looking toward the next meeting on June 28-29 as the time to take pro-growth steps. The crisis in the 17 euro countries will come up tonight only “at the very end,” the EU President said in a pre-summit letter.
German interest rates continued to fall today on the Greek situation, the US 10 yr note is lower in yield early today on the same concerns. That said, while there is little reason to expect interest rates will increase, the US 10 yr still has strong resistance at 1.70%, the level that hasn’t been breached on a closing basis. As long as the on-going uncertainty remains the US interest rate markets will remain at these levels; to crack 1.70% on the 10 yr and send mortgage rates to another historic low Greece will have to actually default. IN the meantime officials in Europe will never acquiesce that Greece will leave the EU, always holding out hope that the contagion will not spread to other indebted countries in the region sitting on the brink.
At 9:30 the DJIA opened -55, NASDAQ -24. The 10 yr note traded at 1.74% -4 bp frm yesterday’s close; MBS 30 yr price +5/32 (.15 bp) frm yesterday’s close.
At 10:00 April new home sales were expected up 3.3%; as reported up 3.3% at 343K units annualized, the median sales price $235,700.00 +4.9% yr/yr; based on present sales there is a 5.1 month supply.
The March FHFA housing price index, expected up 0.3%, increased 1.8% and +2.7% yr/yr.
The weekly MBA mortgage applications were up last week. The Market Composite Index, a measure of mortgage loan application volume, increased 3.8% on a seasonally adjusted basis from one week earlier. The Refinance Index increased 5.6% from the previous week. This is the third consecutive weekly increase in the Refinance Index which is at its highest level since February 10, 2012. The seasonally adjusted Purchase Index decreased 3.0% from one week earlier to its lowest level since April 20, 2012. The four week moving average for the seasonally adjusted Market Index is up 3.72 percent. The four week moving average is up 0.17% for the seasonally adjusted Purchase Index, while this average is up 4.83% for the Refinance Index. The refinance share of mortgage activity increased to 76.6% of total applications from 74.9% the previous week. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) decreased to 3.93 percent, the lowest rate in the history of the survey, from 3.96 percent, with points increasing to 0.39 from 0.37 (including the origination fee) for 80% loans. The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,500) increased to 4.25 percent from 4.20 percent, with points increasing to 0.42 from 0.36 (including the origination fee) for 80% loans. The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 3.73 percent, the lowest rate in the history of the survey, from 3.75 percent, with points decreasing to 0.57 from 0.66 (including the origination fee) for 80% loans.
At 1:00 Treasury will auction $35B of 5 yr notes; yesterday’s 2 yr auction saw good demand, likely that will be the same today.
Tuesday, May 22, 2012
Mortgage Rates
Interest rate markets opened weaker today after a little weakness yesterday. Europe continues to drag global markets around, however the slight increase in interest rates yesterday and today is more a technical issue than any significant change in underlying fundamentals. The bellwether 10 yr note, the main driver for mortgage rates, fell to 1.70% last Thursday and Friday, the level it hit last Sept before rates shot up to 2.00% in the next three days. With no fear news out of Europe and increasing talk out of China that it is going to increase spending to improve its growth, traders have no immediate reason to push interest rates lower. China plans to speed up approval of infrastructure projects and allocate construction funding faster to improve growth, the China Securities Journal reported. At the lowest levels in history, interest rates will decline more only as the global situation deteriorates. Betting on Greece leaving the 17 member euro currency has driven billions of global cash to US treasuries. Europe has demonstrated over the last 2+ years that what seems likely today can change quickly. Recall there was a bailout plan in place, investors and central bankers lauded it as the beginning of the end of the crisis in Greece.
Merkel and Hollande, leaders of Germany and France, will meet today. Both have different ideas of what is best to save Greece and the entire EU; Merkel has forced spending cuts although there hasn’t been many, and higher taxes that are driving growth down and unemployment higher. Hollande, the new President of France, was elected on his view that Europe must increase spending and back off from some of what he has called draconian demands on Greece, Ireland and Portugal.
European leaders are scheduled to meet in Brussels tomorrow. Merkel said she won’t shy away from disagreeing with French President Hollande, saying good cooperation “doesn’t exclude differing positions.” France isn’t out to create conflict and will welcome “all the tools, all the proposals” at the meeting, Hollande said. Kissy, Kissy; wonder why Europe is keeping the global markets in turmoil?
At 9:30 ahead of April existing home sales at 10:00, the DJIA opened +6, NASDAQ +5; the 10 yr note at 1.79% +5 bp and MBS 30 yr prices -6/32 (.18 bp). The gain at the opened evaporated in 10 minutes on the key indexes. The steady sell off in the stock market mirrors a pullback underway in retail sales, according to ICSC-Goldman whose same-store sales index, at minus 1.7% in the May 19 week, is down for a fourth week in a row. The year-on-year rate is down seven tenths to plus 3.8%. The report notes little positive effect from favorable weather or from lower gas prices.
Japan’s sovereign-credit rating was lowered by Fitch because of limited progress by the government in tackling the world’s biggest public debt burden. The long-term, local currency grade fell by one step to A+, the fifth highest ranking, with a negative outlook, Fitch said in a statement today. The foreign-currency rating declined two steps to A+. The Organization for Economic Cooperation and Development said today that gross public debt will be 223% of GDP next year, up from a projected 214% in 2012; wherever one turns in the world sovereign debt is increasing at alarming rates; Japan, Europe, the US and the list goes on and on.
April existing home sales were expected to have increased 3.7%, as reports sales were up 3.4% after march was revised from -2.6% to -2.8%. The median sales price at $177,400 up 10.1% yr/yr and the highest since Jan 2006. Based on the sales there is a 6.6 month supply. The lack of inventory is pushing prices up. Treasuries and mortgages lost more ground while the stock market turned up on the report.
At 1:00 this afternoon Treasury auction $35B of 2 yr notes, demand is expected to be decent. If the 2 doesn’t match the outlook of good demand it won’t bode well for tomorrow’s 5 yr note and Thursday’s 7 yr note auctions.
Interest rate markets opened weaker today after a little weakness yesterday. Europe continues to drag global markets around, however the slight increase in interest rates yesterday and today is more a technical issue than any significant change in underlying fundamentals. The bellwether 10 yr note, the main driver for mortgage rates, fell to 1.70% last Thursday and Friday, the level it hit last Sept before rates shot up to 2.00% in the next three days. With no fear news out of Europe and increasing talk out of China that it is going to increase spending to improve its growth, traders have no immediate reason to push interest rates lower. China plans to speed up approval of infrastructure projects and allocate construction funding faster to improve growth, the China Securities Journal reported. At the lowest levels in history, interest rates will decline more only as the global situation deteriorates. Betting on Greece leaving the 17 member euro currency has driven billions of global cash to US treasuries. Europe has demonstrated over the last 2+ years that what seems likely today can change quickly. Recall there was a bailout plan in place, investors and central bankers lauded it as the beginning of the end of the crisis in Greece.
Merkel and Hollande, leaders of Germany and France, will meet today. Both have different ideas of what is best to save Greece and the entire EU; Merkel has forced spending cuts although there hasn’t been many, and higher taxes that are driving growth down and unemployment higher. Hollande, the new President of France, was elected on his view that Europe must increase spending and back off from some of what he has called draconian demands on Greece, Ireland and Portugal.
European leaders are scheduled to meet in Brussels tomorrow. Merkel said she won’t shy away from disagreeing with French President Hollande, saying good cooperation “doesn’t exclude differing positions.” France isn’t out to create conflict and will welcome “all the tools, all the proposals” at the meeting, Hollande said. Kissy, Kissy; wonder why Europe is keeping the global markets in turmoil?
At 9:30 ahead of April existing home sales at 10:00, the DJIA opened +6, NASDAQ +5; the 10 yr note at 1.79% +5 bp and MBS 30 yr prices -6/32 (.18 bp). The gain at the opened evaporated in 10 minutes on the key indexes. The steady sell off in the stock market mirrors a pullback underway in retail sales, according to ICSC-Goldman whose same-store sales index, at minus 1.7% in the May 19 week, is down for a fourth week in a row. The year-on-year rate is down seven tenths to plus 3.8%. The report notes little positive effect from favorable weather or from lower gas prices.
Japan’s sovereign-credit rating was lowered by Fitch because of limited progress by the government in tackling the world’s biggest public debt burden. The long-term, local currency grade fell by one step to A+, the fifth highest ranking, with a negative outlook, Fitch said in a statement today. The foreign-currency rating declined two steps to A+. The Organization for Economic Cooperation and Development said today that gross public debt will be 223% of GDP next year, up from a projected 214% in 2012; wherever one turns in the world sovereign debt is increasing at alarming rates; Japan, Europe, the US and the list goes on and on.
April existing home sales were expected to have increased 3.7%, as reports sales were up 3.4% after march was revised from -2.6% to -2.8%. The median sales price at $177,400 up 10.1% yr/yr and the highest since Jan 2006. Based on the sales there is a 6.6 month supply. The lack of inventory is pushing prices up. Treasuries and mortgages lost more ground while the stock market turned up on the report.
At 1:00 this afternoon Treasury auction $35B of 2 yr notes, demand is expected to be decent. If the 2 doesn’t match the outlook of good demand it won’t bode well for tomorrow’s 5 yr note and Thursday’s 7 yr note auctions.
Monday, May 21, 2012
Mortgage Rates
The bond and mortgage markets started slightly weaker this morning but have managed to hold close to unchanged with stock indexes trading a little better. There are no economic reports today. This week Treasury will auction $99B of notes beginning tomorrow through Thursday; with rates now at historic lows the demand will be the measurement of how well the auctions go off. Economic reports this week have April existing and new home sales, durable goods orders and of course weekly jobless claims.
In Europe the EU summit starts Wednesday. German and French finance chiefs are scheduled to meet in Berlin before the summit meeting. Concern Greece will exit the euro erased about $4 trillion from global stock markets this month. There is a strong desire for keeping Greece in the 17 county currency, although Germany still holds court with its insistence for severe austerity. Greece will have another election in June, in essence to determine whether voters want to stay or go; while the election isn’t framed as a do or die thing, that is what it will be. Hedge funds reduced wagers on a rally in commodities to the lowest this year on mounting speculation that Greece will leave the euro, slowing global growth and curbing demand for everything from copper to soybeans. US stock indexes trading higher on comments from China it would support the economy and German and French officials prepared to meet before a summit. There is an increasing belief that Greece will leave the euro currency, that belief will keep US interest rates from increasing much. According to one report 90% of respondents now believe Greece will go. On Saturday at Camp David G-8 leaders urged Greece to stay within the euro area as polls in the country showed a close race between parties supporting and opposing the European Union’s bailout deal.
Speculation has risen that the Fed may need to add to the $12.8 trillion already spent to avert a second recession in three years after reports showed jobs are growing more slowly than forecast and Bernanke said April 25 that the Fed “remains prepared to do more as needed.” For first time since it announced Operation Twist in September, the Fed’s preferred gauge of measuring traders’ inflation expectations is poised to fall for a second straight month. Six weeks frm now the Fed’s Operation Twist is set to end, with inflation not a factor and the weakening global and US economy there is likely to be increasing speculation the Fed will either extend it or have another plan to keep interest rates from increasing.
At 9:30 the DJIA opened +25, NASDAQ +5; Facebook trade started lower than its IPO price last Friday -$3.00 frm the IPO price of $38.00. The 10 yr note -3/32; mtg prices traded about unchanged from Friday.
Interest rate markets continue their bullish bias, mostly on the inability of Europe’s leaders to come to any significant plan to keep Greece in the EU while softening and supporting moves to boost growth with spending increases. Two plus years and counting as the region chokes on debts it can’t pay and disagreement on how to create a miracle that will save the EU. If Greece leaves the fear of contagion to Ireland, Portugal and Spain will increase exponentially. The remainder of the day the bond and mortgage markets will take their lead from the US stock market; At 10:00 the key indexes are slightly better but appear to be struggling to hold gas.
The bond and mortgage markets started slightly weaker this morning but have managed to hold close to unchanged with stock indexes trading a little better. There are no economic reports today. This week Treasury will auction $99B of notes beginning tomorrow through Thursday; with rates now at historic lows the demand will be the measurement of how well the auctions go off. Economic reports this week have April existing and new home sales, durable goods orders and of course weekly jobless claims.
In Europe the EU summit starts Wednesday. German and French finance chiefs are scheduled to meet in Berlin before the summit meeting. Concern Greece will exit the euro erased about $4 trillion from global stock markets this month. There is a strong desire for keeping Greece in the 17 county currency, although Germany still holds court with its insistence for severe austerity. Greece will have another election in June, in essence to determine whether voters want to stay or go; while the election isn’t framed as a do or die thing, that is what it will be. Hedge funds reduced wagers on a rally in commodities to the lowest this year on mounting speculation that Greece will leave the euro, slowing global growth and curbing demand for everything from copper to soybeans. US stock indexes trading higher on comments from China it would support the economy and German and French officials prepared to meet before a summit. There is an increasing belief that Greece will leave the euro currency, that belief will keep US interest rates from increasing much. According to one report 90% of respondents now believe Greece will go. On Saturday at Camp David G-8 leaders urged Greece to stay within the euro area as polls in the country showed a close race between parties supporting and opposing the European Union’s bailout deal.
Speculation has risen that the Fed may need to add to the $12.8 trillion already spent to avert a second recession in three years after reports showed jobs are growing more slowly than forecast and Bernanke said April 25 that the Fed “remains prepared to do more as needed.” For first time since it announced Operation Twist in September, the Fed’s preferred gauge of measuring traders’ inflation expectations is poised to fall for a second straight month. Six weeks frm now the Fed’s Operation Twist is set to end, with inflation not a factor and the weakening global and US economy there is likely to be increasing speculation the Fed will either extend it or have another plan to keep interest rates from increasing.
At 9:30 the DJIA opened +25, NASDAQ +5; Facebook trade started lower than its IPO price last Friday -$3.00 frm the IPO price of $38.00. The 10 yr note -3/32; mtg prices traded about unchanged from Friday.
Interest rate markets continue their bullish bias, mostly on the inability of Europe’s leaders to come to any significant plan to keep Greece in the EU while softening and supporting moves to boost growth with spending increases. Two plus years and counting as the region chokes on debts it can’t pay and disagreement on how to create a miracle that will save the EU. If Greece leaves the fear of contagion to Ireland, Portugal and Spain will increase exponentially. The remainder of the day the bond and mortgage markets will take their lead from the US stock market; At 10:00 the key indexes are slightly better but appear to be struggling to hold gas.
Friday, May 18, 2012
Mortgage Rates
The bond and mortgage markets started a little weaker this morning with stock indexes better. Not surprising however after the run the bond market drove long term rates (10 yr) down from 1.90% to 1.70% over the last five sessions, and the stock market down 9 of the last 10 days. The financial markets remain bullish for interest rates and bearish on stocks. There are no economic reports to think about today.
The day’s big event is Facebook going public today; the stock will begin to trade at 11:00 am at the IPO price of $38.00.
Moody’s Investors Service downgraded 16 Spanish banks last night, citing the nation’s recession, reduced funding access for lenders and deterioration in loan quality that will spread beyond real estate to household and company loans. Concern more bad loans will come to light at Spanish banks has driven up the country’s borrowing costs on speculation the final bill may hurt government finances. Spanish 10-year bond yields surged to 6.46% this week, the highest since November. The yield slipped 7 basis points to 6.21% today. With unemployment topping 24 percent and the economy set to shrink 1.8 percent this year, according to International Monetary Fund estimates, analysts say the state will need to impose more charges on banks as the slump damages assets beyond real estate.
In China, prices of new homes fell from a year earlier in 46 of the 70 cities tracked by the National Bureau of Statistics, the agency said today. Many analysts are lowering its estimate for China’s second-quarter growth after weaker-than-forecast economic data released last week. The nation’s expansion may drop to a 13-year low this year. The slowing global economies are directly yield to Greece and other European economies as the region continues to be unable to stop the concern that Greece’s debt problem will eventually force it out of the 17 member Union and spread to Ireland and Portugal; Spain also suffering and becoming more a concern.
Angela Merkel and fellow European leaders will face pressure from their G-8 counterparts to do more after speculation Greece will exit the euro wiped about $4 trillion from global stock markets this month. The summit starts today in the U.S. Greece has new elections on June17th, in the meantime Germany has to re-think the severe austerity it jammed down Greece and other EU countries with debt default concerns. France’s new President and the recent inability in Greece to form a government that will accept the draconian spending cuts pushed by Germany. It isn’t news that Europe is in complete turmoil as no matter the debate, in the end there is not enough money to fend off eventual defaults. It keeps on dragging on but reality is increasingly sinking in that defaults and bank failures are inevitable.
Some minor price declines today in the bond and mortgage markets, but the outlook remains positive for lower rates. The 10 yr and mortgages have made a huge run over the week or so, a slight pullback isn’t unusual. At 9:30 the stock market (DJIA) opened +45 but by 10:00 the key indexes were having trouble holding gains. 1.70% on the 10 yr note is a technical resistance level that held the rally last Sept; this time though we expect the 10 will move below 1.70% with the potential of 1.50%, especially if traders believe the Fed will launch anther QE. Given the decline in economic outlooks around the world the Fed is more likely to ease again to continue pushing rates lower and with the intent that investors will be forced into the stock market and business will increase spending; at least that is what many believe.
The bond and mortgage markets started a little weaker this morning with stock indexes better. Not surprising however after the run the bond market drove long term rates (10 yr) down from 1.90% to 1.70% over the last five sessions, and the stock market down 9 of the last 10 days. The financial markets remain bullish for interest rates and bearish on stocks. There are no economic reports to think about today.
The day’s big event is Facebook going public today; the stock will begin to trade at 11:00 am at the IPO price of $38.00.
Moody’s Investors Service downgraded 16 Spanish banks last night, citing the nation’s recession, reduced funding access for lenders and deterioration in loan quality that will spread beyond real estate to household and company loans. Concern more bad loans will come to light at Spanish banks has driven up the country’s borrowing costs on speculation the final bill may hurt government finances. Spanish 10-year bond yields surged to 6.46% this week, the highest since November. The yield slipped 7 basis points to 6.21% today. With unemployment topping 24 percent and the economy set to shrink 1.8 percent this year, according to International Monetary Fund estimates, analysts say the state will need to impose more charges on banks as the slump damages assets beyond real estate.
In China, prices of new homes fell from a year earlier in 46 of the 70 cities tracked by the National Bureau of Statistics, the agency said today. Many analysts are lowering its estimate for China’s second-quarter growth after weaker-than-forecast economic data released last week. The nation’s expansion may drop to a 13-year low this year. The slowing global economies are directly yield to Greece and other European economies as the region continues to be unable to stop the concern that Greece’s debt problem will eventually force it out of the 17 member Union and spread to Ireland and Portugal; Spain also suffering and becoming more a concern.
Angela Merkel and fellow European leaders will face pressure from their G-8 counterparts to do more after speculation Greece will exit the euro wiped about $4 trillion from global stock markets this month. The summit starts today in the U.S. Greece has new elections on June17th, in the meantime Germany has to re-think the severe austerity it jammed down Greece and other EU countries with debt default concerns. France’s new President and the recent inability in Greece to form a government that will accept the draconian spending cuts pushed by Germany. It isn’t news that Europe is in complete turmoil as no matter the debate, in the end there is not enough money to fend off eventual defaults. It keeps on dragging on but reality is increasingly sinking in that defaults and bank failures are inevitable.
Some minor price declines today in the bond and mortgage markets, but the outlook remains positive for lower rates. The 10 yr and mortgages have made a huge run over the week or so, a slight pullback isn’t unusual. At 9:30 the stock market (DJIA) opened +45 but by 10:00 the key indexes were having trouble holding gains. 1.70% on the 10 yr note is a technical resistance level that held the rally last Sept; this time though we expect the 10 will move below 1.70% with the potential of 1.50%, especially if traders believe the Fed will launch anther QE. Given the decline in economic outlooks around the world the Fed is more likely to ease again to continue pushing rates lower and with the intent that investors will be forced into the stock market and business will increase spending; at least that is what many believe.
Thursday, May 17, 2012
Wednesday, May 16, 2012
Mortgage Rates
Interest rates this morning starting a little lower in price; at 9:00 the 10 yr note -11/32 at 1.81% +4 bp and mortgage prices -5/32 (.15 bp). Prior to 8:30 stock indexes were lower and mortgage prices about unchanged. At 8:30 April housing starts were +2.6%, slightly less than +3.8% expected but March starts were revised to -2.6% frm -5.8% originally reported; single family starts in April increased 2.3%. April building permits expected -2.3% were -7.0%, March permits were revised frm +6.8% to +8.8%.
At 9:15 April industrial production expected up 0.6% increased by 1.1%, March however was revised from unch to -0.6%. April capacity utilization was expected at 79.0%, utilization increased to 79.2 the highest level of factory use since Arp 2008. The better data added a little more support to the equity markets but not much.
The DJIA opened +32 at 9:30, the 10 yr at 9:30 -11/32 at 1.81% +4 bp and MBS prices -4/32 (.12 bp). Prior to 9:30 mortgage prices traded down 5/32 (.15 bp).
Greece has set June 17th for another election after the political parties could not agree on a coalition government after last week’s elections didn’t get any consensus. The country is facing the decision whether or not to exit the EU as the Union has set severe austerity and job cuts as requirements for additional bailout money. Citizens are increasingly unwilling to endure the serious sacrifices demanded. Yesterday the new President of France Francois Hollande met with Angela Merkel; Merkel continues to say she wants Greece to stay in the EU, but she also isn’t in favor of additional bailout funds unless the Greeks are willing to live in almost depression conditions. Opinions and bets are equally divided on what will happen in Greece; some experts are saying Greece will exit while others are believing Greece will stay. In the meantime global markets will continue to be driven on daily news out of Europe.
Treasuries are lower in price as optimism about the economic outlook damped demand for the safety of U.S. debt and as Greece named an interim government before elections to end a political impasse. A Greek caretaker government will prepare elections, probably on June 17, said Greece’s Democratic Left leader amid concern the country will abandon the euro common currency. Germany’s Finance Minister Wolfgang Schaeuble said another Greek election would be a referendum on whether the country retains the euro. “If Greece -- and this is the will of the great majority - - wants to stay in the euro, then they have to accept the conditions,” Schaeuble told reporters yesterday in Brussels.“ Otherwise it isn’t possible.”
Mortgage applications increased 9.2% from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending May 11, 2012. The Refinance Index increased 13.0% from the previous week. The seasonally adjusted Purchase Index decreased 2.4% from one week earlier. The four week moving average for the seasonally adjusted Market Index is up 1.77%. The four week moving average is up 1.57% for the seasonally adjusted Purchase Index, while this average is up 1.88% for the Refinance Index. The refinance share of mortgage activity increased to 74.9% of total applications from 72.1% the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 5.4% from 5.7% of total applications from the previous week.
This afternoon at 2:00 the minutes from the 4/25 FOMC meeting. Markets want to focus on debate over whether the Fed will launch another QE. We continue to hold the Fed will not ease again; what would be the point? Interest rates are already low and there is little reason to expect they will increase much over the next few months. Unless the Fed can make a case that another easing will increase employment there isn’t much incentive to continue easing.
Interest rates this morning starting a little lower in price; at 9:00 the 10 yr note -11/32 at 1.81% +4 bp and mortgage prices -5/32 (.15 bp). Prior to 8:30 stock indexes were lower and mortgage prices about unchanged. At 8:30 April housing starts were +2.6%, slightly less than +3.8% expected but March starts were revised to -2.6% frm -5.8% originally reported; single family starts in April increased 2.3%. April building permits expected -2.3% were -7.0%, March permits were revised frm +6.8% to +8.8%.
At 9:15 April industrial production expected up 0.6% increased by 1.1%, March however was revised from unch to -0.6%. April capacity utilization was expected at 79.0%, utilization increased to 79.2 the highest level of factory use since Arp 2008. The better data added a little more support to the equity markets but not much.
The DJIA opened +32 at 9:30, the 10 yr at 9:30 -11/32 at 1.81% +4 bp and MBS prices -4/32 (.12 bp). Prior to 9:30 mortgage prices traded down 5/32 (.15 bp).
Greece has set June 17th for another election after the political parties could not agree on a coalition government after last week’s elections didn’t get any consensus. The country is facing the decision whether or not to exit the EU as the Union has set severe austerity and job cuts as requirements for additional bailout money. Citizens are increasingly unwilling to endure the serious sacrifices demanded. Yesterday the new President of France Francois Hollande met with Angela Merkel; Merkel continues to say she wants Greece to stay in the EU, but she also isn’t in favor of additional bailout funds unless the Greeks are willing to live in almost depression conditions. Opinions and bets are equally divided on what will happen in Greece; some experts are saying Greece will exit while others are believing Greece will stay. In the meantime global markets will continue to be driven on daily news out of Europe.
Treasuries are lower in price as optimism about the economic outlook damped demand for the safety of U.S. debt and as Greece named an interim government before elections to end a political impasse. A Greek caretaker government will prepare elections, probably on June 17, said Greece’s Democratic Left leader amid concern the country will abandon the euro common currency. Germany’s Finance Minister Wolfgang Schaeuble said another Greek election would be a referendum on whether the country retains the euro. “If Greece -- and this is the will of the great majority - - wants to stay in the euro, then they have to accept the conditions,” Schaeuble told reporters yesterday in Brussels.“ Otherwise it isn’t possible.”
Mortgage applications increased 9.2% from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending May 11, 2012. The Refinance Index increased 13.0% from the previous week. The seasonally adjusted Purchase Index decreased 2.4% from one week earlier. The four week moving average for the seasonally adjusted Market Index is up 1.77%. The four week moving average is up 1.57% for the seasonally adjusted Purchase Index, while this average is up 1.88% for the Refinance Index. The refinance share of mortgage activity increased to 74.9% of total applications from 72.1% the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 5.4% from 5.7% of total applications from the previous week.
This afternoon at 2:00 the minutes from the 4/25 FOMC meeting. Markets want to focus on debate over whether the Fed will launch another QE. We continue to hold the Fed will not ease again; what would be the point? Interest rates are already low and there is little reason to expect they will increase much over the next few months. Unless the Fed can make a case that another easing will increase employment there isn’t much incentive to continue easing.
Tuesday, May 15, 2012
Monday, May 14, 2012
Mortgage Rates
This Week; interest rates are likely to continue lower on increasing fears Europe is facing defaults from Greece and increasing likelihood Greece will depart the EU. If Greece were to exit the EU it may set up a domino effect with Ireland, Portugal and Spain; Europe’s attempt at severe austerity inn efforts to bring countries’’ fiscal spending under control has failed. In Germany over the weekend Angela Merkel’s party suffered another defeat in local elections, last weekend another local election went against her. Germany is the rock in Europe and voters are showing their resistance to any additional help from the country. In Greece over the weekend the attempt to form a coalition government has failed leading now to another general election; most Greeks are rebelling against the austerity pledge Greek officials agreed on a few months ago.
This week after a week with little domestic economic data, there are a number of key data points on Tuesday, Wednesday and Thursday. April reports for the most part; retail sales, CPI, housing starts and permits, industrial production and factory use, the Philly Fed May index. The minutes from the 4/25 FOMC meeting will get a lot of focus, looking for clues about another possible QE; we still hold the Fed will not initiate another QE but there are many analysts and economists thinking the Fed will ease one more time. If the Fed were to ease again it would likely have to happen at the next FOMC meeting in June, after that the Fed will likely refrain with elections coming in November.
This Week; interest rates are likely to continue lower on increasing fears Europe is facing defaults from Greece and increasing likelihood Greece will depart the EU. If Greece were to exit the EU it may set up a domino effect with Ireland, Portugal and Spain; Europe’s attempt at severe austerity inn efforts to bring countries’’ fiscal spending under control has failed. In Germany over the weekend Angela Merkel’s party suffered another defeat in local elections, last weekend another local election went against her. Germany is the rock in Europe and voters are showing their resistance to any additional help from the country. In Greece over the weekend the attempt to form a coalition government has failed leading now to another general election; most Greeks are rebelling against the austerity pledge Greek officials agreed on a few months ago.
This week after a week with little domestic economic data, there are a number of key data points on Tuesday, Wednesday and Thursday. April reports for the most part; retail sales, CPI, housing starts and permits, industrial production and factory use, the Philly Fed May index. The minutes from the 4/25 FOMC meeting will get a lot of focus, looking for clues about another possible QE; we still hold the Fed will not initiate another QE but there are many analysts and economists thinking the Fed will ease one more time. If the Fed were to ease again it would likely have to happen at the next FOMC meeting in June, after that the Fed will likely refrain with elections coming in November.
Friday, May 11, 2012
Thursday, May 10, 2012
Mortgage Rates
Treasuries and mortgages started slightly weaker this morning with stock indexes trading higher and stocks in Europe rallying. Nothing significant has changed, mostly seeing technical moves after declines in interest rates and six days of selling in the US stock market.
Weekly jobless claims at 8:30 were in line with forecasts, -1/k to 367K; continuing claims, those who’ve used up their traditional benefits and are collecting emergency and extended payments declined by about 40,500 to 3.04 million. The market is assessing that the data indicate the surge in claims in the first three weeks of April was probably tied to the timing of the Easter holiday rather than a deterioration in employment. The number of people on unemployment benefit rolls was the smallest since July 2008.
The March trade deficit was larger than forecasts at -$51.8B, forecasts were for the deficit at -$49.9B; no reaction to the report. A 5.2% jump in imports, the biggest in more than a year, swamped the 2.9% gain in exports, which also reached a record.
The stock market opened better this morning; the DJIA started +45, NASDAQ +13 and S&P +9. The 10 yr note yield at 1.90% +7 bp frm yesterday’s close but it is the new 10 yr issued yesterday at the auction. The auction yesterday was at 1.855% so the new 10 is up 3 to 4 bp. Mortgage prices weaker at 9:30 but not much, down 3/32 (.09 bp).
Europe remains a main factor in the global markets; Greece is the centerpiece. Greek voters rejected the heavy austerity put on them by EU officials and moves it closer to default and exit from the European Union. While investors are flooding into US treasuries on safety concerns, it is not likely in the end that Greece will be kicked out of the EU, it would cost billions for the ECB and other EU countries based on analysts’ estimates if Greece were to default. European governments have poured money into Greece since its first rescue was agreed in April 2010 in a bid to keep the country in the euro. The ECB also stands to lose much if Greece walks away from its obligations. The central bank bought about 50 billion euros of the government’s bonds to push down yields and help the nation retain access to the capital markets. Trade imbalances between the 17 national central banks using the single currency -- indicates that the Bank of Greece owes its counterparts 104 billion euros, according on expert. That is what we hear today, tomorrow will likely have a different slant. The prime reason markets and investors panic over Europe’s debts is that it is always uncertain about what will occur next; that isn’t likely to change for a long time (years), and will continue to roil markets as officials continue to try to hold the Union together.
This afternoon Treasury auction $16B of 30 yr bonds; yesterday’s 10 yr was considered OK but the stats were not up to the recent averages. It was seen as good primarily because of the low yield after the recent decline in rates.
At 10:00 the new 10 yr note is at 1.90% after the old 10 was unable to break resistance at 1.80%. Mortgage prices a little weaker but not much. The larger outlook remains bullish however the yields on interest rates are at levels that historically (over the last eight months) have failed to decline much more than where we have them now. That said, we don’t expect rates will increase much, and it would take the 10 yr note to increase over 2.00% to be concerned. The 30 yr FNMA at 104.09 bp has support at 103.69 bp. The remainder of the day the bond market will traded on the stock market which is moving higher this morning.
Treasuries and mortgages started slightly weaker this morning with stock indexes trading higher and stocks in Europe rallying. Nothing significant has changed, mostly seeing technical moves after declines in interest rates and six days of selling in the US stock market.
Weekly jobless claims at 8:30 were in line with forecasts, -1/k to 367K; continuing claims, those who’ve used up their traditional benefits and are collecting emergency and extended payments declined by about 40,500 to 3.04 million. The market is assessing that the data indicate the surge in claims in the first three weeks of April was probably tied to the timing of the Easter holiday rather than a deterioration in employment. The number of people on unemployment benefit rolls was the smallest since July 2008.
The March trade deficit was larger than forecasts at -$51.8B, forecasts were for the deficit at -$49.9B; no reaction to the report. A 5.2% jump in imports, the biggest in more than a year, swamped the 2.9% gain in exports, which also reached a record.
The stock market opened better this morning; the DJIA started +45, NASDAQ +13 and S&P +9. The 10 yr note yield at 1.90% +7 bp frm yesterday’s close but it is the new 10 yr issued yesterday at the auction. The auction yesterday was at 1.855% so the new 10 is up 3 to 4 bp. Mortgage prices weaker at 9:30 but not much, down 3/32 (.09 bp).
Europe remains a main factor in the global markets; Greece is the centerpiece. Greek voters rejected the heavy austerity put on them by EU officials and moves it closer to default and exit from the European Union. While investors are flooding into US treasuries on safety concerns, it is not likely in the end that Greece will be kicked out of the EU, it would cost billions for the ECB and other EU countries based on analysts’ estimates if Greece were to default. European governments have poured money into Greece since its first rescue was agreed in April 2010 in a bid to keep the country in the euro. The ECB also stands to lose much if Greece walks away from its obligations. The central bank bought about 50 billion euros of the government’s bonds to push down yields and help the nation retain access to the capital markets. Trade imbalances between the 17 national central banks using the single currency -- indicates that the Bank of Greece owes its counterparts 104 billion euros, according on expert. That is what we hear today, tomorrow will likely have a different slant. The prime reason markets and investors panic over Europe’s debts is that it is always uncertain about what will occur next; that isn’t likely to change for a long time (years), and will continue to roil markets as officials continue to try to hold the Union together.
This afternoon Treasury auction $16B of 30 yr bonds; yesterday’s 10 yr was considered OK but the stats were not up to the recent averages. It was seen as good primarily because of the low yield after the recent decline in rates.
At 10:00 the new 10 yr note is at 1.90% after the old 10 was unable to break resistance at 1.80%. Mortgage prices a little weaker but not much. The larger outlook remains bullish however the yields on interest rates are at levels that historically (over the last eight months) have failed to decline much more than where we have them now. That said, we don’t expect rates will increase much, and it would take the 10 yr note to increase over 2.00% to be concerned. The 30 yr FNMA at 104.09 bp has support at 103.69 bp. The remainder of the day the bond market will traded on the stock market which is moving higher this morning.
Wednesday, May 9, 2012
Mortgage Rates----
The elections in Europe in Greece and France over the weekend continue to be played out, and it isn’t likely to end anytime soon. The elections in the two countries is sending serious shock waves in global markets that Europe is year away from solving its debt and economic problems. Greek citizens roundly rejected the austerity plan forced on them while in France voters said enough to the idea of severe spending cuts at the expense of jobs and being aligned with Germany’s insistence for increased austerity. In short, no matter that spending cuts are necessary and understandable, people are saying enough. Europe is now in complete disarray with no plan in the face of the rejections by voters over the weekend. Not just France and Greece; governments in the Netherlands have been turned out as well as in Germany itself with a resounding defeat in one German state against Angela Merkel’s government.
Denmark’s Financial Supervisory Authority told banks in February to comply with stricter write-down standards, a requirement it said would have limited impact on loan losses as it estimated most banks already followed the revised rules. Since then, the country’s second- and third-largest listed lenders, respectively, raised their forecasts for impairments this year, citing the new regulatory standards. Greece’s Syriza party expects former finance minister who leads the Pasok party, to send a letter to the EU revoking their written pledges to implement austerity measures by the time he meets them today to discuss a government alliance. The risk of Greece leaving the euro by the end of 2013 has risen to as high as 75 percent, Citigroup Inc. said on Monday. If Greece leaves the EU there is fear Spain will need more bail-out money as well as increased pressure from its citizens to resist austerity. Spain’s interest rates spiked today od increasing fears of defaults as voters rebel.
Europe is nowhere close to any successful plan to solve its sovereign debt problems or improving it’s economies. Europe’s economies will continue to decline and there will be defaults of sovereign debts in Greece and a number of other countries. It will be years before Europe can right itself, in the meantime the global economic outlook must be lowered in the minds of investors. Money from around the world continues to flood US treasury markets as fears of defaults and uncertainties drive US rates to new historical lows.
Adding another negative; Moody’s is about the cut the credit ratings on 100 banks following moves earlier by S&P and Fitch. Moody’s said in January it would overhaul how it rates European banks and firms with global securities operations to reflect the adverse effects of the sovereign-debt crisis, dwindling economic growth and the latest round of capital rules set by the Basel Committee on Banking Supervision. In addition to the ele3ctions and failing governments in Europe, a cut in ratings adds another element of fear for investors.
At 9:30 the DJIA opened down -108, NASDAQ -36, S&P -14; the 10 yr note 1.81% after early trade at 1.80%. Mortgage prices +3/32 (.09 bp).
At 10:00 March wholesale inventories expected +0.6% was up just 0.3%; sales up 0.5% with an inventory to sales ratio unchanged at 1.17 months.
The MBA Market Composite Index increased 1.7% on a seasonally adjusted basis from one week earlier. Increases to the seasonally adjusted Market Composite and Purchase indices were driven by increases in their Conventional components. Application activity within the Government market decreased for both of these measures from last week. Likewise, the Refinance Index increased 1.3% from the previous week, driven by a 1.8% increase to the Conventional Refinance Index, while the Government Refinance Index decreased 2.3%. The seasonally adjusted Purchase Index increased 3.4% from one week earlier, spurred by a 5.4% increase in the seasonally adjusted Conventional Purchase Index.
In the entire history of the 10 yr treasury note there have been three days when the yield was below where it is this morning; on Sept 22nd and 23rd and Oct 4th 2011. How much lower US interest rates will decline is hard to handicap; we are like fish out of water when it comes to forecasting markets in the face of the uncertainty and unprecedented crisis in Europe and the implications for the EU and Europe’s banks as well as economic concerns. Greece is cooked, they will default as we have previously indicated; the focus now is on Spain and Italy, two much larger economies but with heavy debts they can’t pay.
The elections in Europe in Greece and France over the weekend continue to be played out, and it isn’t likely to end anytime soon. The elections in the two countries is sending serious shock waves in global markets that Europe is year away from solving its debt and economic problems. Greek citizens roundly rejected the austerity plan forced on them while in France voters said enough to the idea of severe spending cuts at the expense of jobs and being aligned with Germany’s insistence for increased austerity. In short, no matter that spending cuts are necessary and understandable, people are saying enough. Europe is now in complete disarray with no plan in the face of the rejections by voters over the weekend. Not just France and Greece; governments in the Netherlands have been turned out as well as in Germany itself with a resounding defeat in one German state against Angela Merkel’s government.
Denmark’s Financial Supervisory Authority told banks in February to comply with stricter write-down standards, a requirement it said would have limited impact on loan losses as it estimated most banks already followed the revised rules. Since then, the country’s second- and third-largest listed lenders, respectively, raised their forecasts for impairments this year, citing the new regulatory standards. Greece’s Syriza party expects former finance minister who leads the Pasok party, to send a letter to the EU revoking their written pledges to implement austerity measures by the time he meets them today to discuss a government alliance. The risk of Greece leaving the euro by the end of 2013 has risen to as high as 75 percent, Citigroup Inc. said on Monday. If Greece leaves the EU there is fear Spain will need more bail-out money as well as increased pressure from its citizens to resist austerity. Spain’s interest rates spiked today od increasing fears of defaults as voters rebel.
Europe is nowhere close to any successful plan to solve its sovereign debt problems or improving it’s economies. Europe’s economies will continue to decline and there will be defaults of sovereign debts in Greece and a number of other countries. It will be years before Europe can right itself, in the meantime the global economic outlook must be lowered in the minds of investors. Money from around the world continues to flood US treasury markets as fears of defaults and uncertainties drive US rates to new historical lows.
Adding another negative; Moody’s is about the cut the credit ratings on 100 banks following moves earlier by S&P and Fitch. Moody’s said in January it would overhaul how it rates European banks and firms with global securities operations to reflect the adverse effects of the sovereign-debt crisis, dwindling economic growth and the latest round of capital rules set by the Basel Committee on Banking Supervision. In addition to the ele3ctions and failing governments in Europe, a cut in ratings adds another element of fear for investors.
At 9:30 the DJIA opened down -108, NASDAQ -36, S&P -14; the 10 yr note 1.81% after early trade at 1.80%. Mortgage prices +3/32 (.09 bp).
At 10:00 March wholesale inventories expected +0.6% was up just 0.3%; sales up 0.5% with an inventory to sales ratio unchanged at 1.17 months.
The MBA Market Composite Index increased 1.7% on a seasonally adjusted basis from one week earlier. Increases to the seasonally adjusted Market Composite and Purchase indices were driven by increases in their Conventional components. Application activity within the Government market decreased for both of these measures from last week. Likewise, the Refinance Index increased 1.3% from the previous week, driven by a 1.8% increase to the Conventional Refinance Index, while the Government Refinance Index decreased 2.3%. The seasonally adjusted Purchase Index increased 3.4% from one week earlier, spurred by a 5.4% increase in the seasonally adjusted Conventional Purchase Index.
In the entire history of the 10 yr treasury note there have been three days when the yield was below where it is this morning; on Sept 22nd and 23rd and Oct 4th 2011. How much lower US interest rates will decline is hard to handicap; we are like fish out of water when it comes to forecasting markets in the face of the uncertainty and unprecedented crisis in Europe and the implications for the EU and Europe’s banks as well as economic concerns. Greece is cooked, they will default as we have previously indicated; the focus now is on Spain and Italy, two much larger economies but with heavy debts they can’t pay.
Tuesday, May 8, 2012
Mortgage Rates
Treasuries and mortgages started better this morning but not much; the stock markets in Europe weaker and pushing US indexes down. The elections in France and Greece over the weekend while not a shock, is causing additional fears over debts in all global markets. Greece is the centerfold today as coalition members meet to strike a new government. Greek stocks declined to the lowest level in two decades as political leaders met for a second day to try to form a government after an election that raised questions about the nation’s euro membership. The leader of the Syriza party who has vowed to rip up the terms of Greece’s international bailout, was handed the mandate to try and form a government today after the New Democracy failed to forge an agreement.
There are no scheduled economic reports today; at 1:00 Treasury will auction $32B of 3 yr notes. Likely the auction will meet with good demand with the global economic outlook declining on continual debt issues in Europe with 7 of the 17 euro currency members now officially in recession. Germany remains the only country in the EU that will avoid recession in some degree. German industrial output rose more than three times as much as economists forecast in March, adding to signs that its economy may have avoided recession. Production jumped 2.8% in March after declining 0.3% in February.
The DJIA opened -50, NASDAQ -20, S&P -7. The 10 yr note at 9:30 +3/32 at 1.85% -2 bp and MBS 30 yr prices +3/32 (.09 bp). Since 8:00 this morning there has been no change in US interest rates----sitting quietly as is the recent pattern. Opening up or down then spending the rest of the session with little movement in either direction.
Greek debt defaults appear more likely now than prior to the forced budget was passed in March. The country may be the first developed nation to default on its debt. Two months after forcing through the biggest-ever sovereign bond restructuring, Greece once again faces the prospect of becoming the first developed nation to default on its debt. The government taking office after this weekend’s election has 30 days to decide whether to make today’s interest payment on 20 billion yen ($250 million) of 4.5% notes maturing in 2016, or default. Then, by May 15, officials must decide if they’re going to repay the 436 million euros ($555 million) due on a floating-rate note issued a decade ago. At the moment in a fast moving situation, Greece appears to be headed to exiting the EU and will default. According news reports most Greeks don’t want to go back to the drachma but citizens also don’t want more cuts in spending and jobs.
Gold is crashing today to a four month low ($1612.00); the technicals on gold are increasingly more bearish. Crude continues to decline this morning as global economies slow ($97.00).
We still look for the bellwether 10 yr note to fall to 1.80% after the break of 1.90% last Friday. This is the third day below 1.90%, one more day and we have a new record for the number of days the 10 has traded below 1.90%. Europe back in the spotlight on the recent elections will continue to drive global; investors to US treasuries keeping interest rates from increasing. The Greek problems will keep money flowing into long term treasuries on increasing concerns Greece will default and increasing evidence global economies are slowing growth.
Treasuries and mortgages started better this morning but not much; the stock markets in Europe weaker and pushing US indexes down. The elections in France and Greece over the weekend while not a shock, is causing additional fears over debts in all global markets. Greece is the centerfold today as coalition members meet to strike a new government. Greek stocks declined to the lowest level in two decades as political leaders met for a second day to try to form a government after an election that raised questions about the nation’s euro membership. The leader of the Syriza party who has vowed to rip up the terms of Greece’s international bailout, was handed the mandate to try and form a government today after the New Democracy failed to forge an agreement.
There are no scheduled economic reports today; at 1:00 Treasury will auction $32B of 3 yr notes. Likely the auction will meet with good demand with the global economic outlook declining on continual debt issues in Europe with 7 of the 17 euro currency members now officially in recession. Germany remains the only country in the EU that will avoid recession in some degree. German industrial output rose more than three times as much as economists forecast in March, adding to signs that its economy may have avoided recession. Production jumped 2.8% in March after declining 0.3% in February.
The DJIA opened -50, NASDAQ -20, S&P -7. The 10 yr note at 9:30 +3/32 at 1.85% -2 bp and MBS 30 yr prices +3/32 (.09 bp). Since 8:00 this morning there has been no change in US interest rates----sitting quietly as is the recent pattern. Opening up or down then spending the rest of the session with little movement in either direction.
Greek debt defaults appear more likely now than prior to the forced budget was passed in March. The country may be the first developed nation to default on its debt. Two months after forcing through the biggest-ever sovereign bond restructuring, Greece once again faces the prospect of becoming the first developed nation to default on its debt. The government taking office after this weekend’s election has 30 days to decide whether to make today’s interest payment on 20 billion yen ($250 million) of 4.5% notes maturing in 2016, or default. Then, by May 15, officials must decide if they’re going to repay the 436 million euros ($555 million) due on a floating-rate note issued a decade ago. At the moment in a fast moving situation, Greece appears to be headed to exiting the EU and will default. According news reports most Greeks don’t want to go back to the drachma but citizens also don’t want more cuts in spending and jobs.
Gold is crashing today to a four month low ($1612.00); the technicals on gold are increasingly more bearish. Crude continues to decline this morning as global economies slow ($97.00).
We still look for the bellwether 10 yr note to fall to 1.80% after the break of 1.90% last Friday. This is the third day below 1.90%, one more day and we have a new record for the number of days the 10 has traded below 1.90%. Europe back in the spotlight on the recent elections will continue to drive global; investors to US treasuries keeping interest rates from increasing. The Greek problems will keep money flowing into long term treasuries on increasing concerns Greece will default and increasing evidence global economies are slowing growth.
Monday, May 7, 2012
Mortgage Rates
Treasuries and mortgages are fractionally better this morning but not much. Friday the 10 yr note pushed through 1.90%, a key technical resistance level. Stock indexes in pre-market opening were trading weaker supporting the bond market. In Europe over the weekend Greece and France voted out the leadership that drove the massive austerity plans that have crippled Europe. France elected Francois Hollande and ousted Sarkozy; Sarkozy and Germany’s Angela Merkel were the architects of the severe cuts in spending in the debt riddled countries of Greece, Portugal, Ireland, Italy and Spain that has routed what was left of the economies and driven unemployment to depressionary levels. The results of the elections in the two countries came after a tumultuous few weeks that saw the Dutch government fell as Britain’s conservative led coalition took a whipping in local elections. Most analysts believe voters in Europe are in favor of balanced budgets and good fiscal governance but the spending cuts are too severe and too quick. Germany and France, especially Germany, have forced unemployment higher and dealt the euro economy into a very deep recession.
Here in the US the stock market had a bad week last week and we expect additional selling this week as investors are increasingly concerned valuations in many of the “hot” issues have become too expensive. Europe’s recession is slowing China and investors see recent US data as evidence the US will slow. That the US will slow growth flies in the face of the most recent Fed forecasts; last week the Fed raised its outlook for GDP growth this year and next compared to their outlook in January. Uncertainty is the word of the moment.
At 9:30 the DJIA opened -46, NASDAQ -13, S&P -4; 10 yr note +2/32 at 1.87% -0.5% while mortgage prices up 2/32 (.06 bp).
This week Treasury will auction $72B of notes and bonds; $32B of 3 yr notes tomorrow, $24B of 10 yr notes on Wednesday and $16B of 30 yr bonds on Thursday. There isn’t much in the way of key economic releases this week. This afternoon at 3:00 March consumer credit; it is one our favorite reports each month although there isn’t a lot reaction when it hits. Credit is expected to have increased $11.0B after +$8.7B in Feb; our focus is on revolving credit (credit card usage) not so much on the headline. Consumer credit has been surging the last six months driven by non-revolving credit, credit in large part that's used to fund vehicle purchases. Revolving credit, which also turned higher late last year, has however been lagging and contracted slightly for a second month in a row.
Last Friday crude oil plunged $4.00, this morning down again now trading well under $100.00 (see below). Oil fell to the lowest level in more than four months after European election results fed speculation that austerity efforts will be derailed and weaker-than-expected jobs data underscored concern the U.S. economy may falter. Crude for June delivery plunged as much as $3.15 to $95.34 a barrel in electronic trading on the New York Mercantile Exchange early this morning. The contract tumbled $4.05 to $98.49 Friday, the lowest close since Feb. 7. Prices slumped 6.1% last week, the biggest weekly drop since September. Over the last three weeks crude as fallen from $104.00.
The remainder of the day will likely be directed by the stock market; the indexes are already off their opening levels. Like a broken record, the 10 yr has never traded below 1.90% for more than three days; the point being that the present levels of long term US rates should be monitored closely. We are not forecasting rates will increase, what we see though is that in the past the 10 yr and mortgages have run into solid resistance under 1.90% on the note.
Treasuries and mortgages are fractionally better this morning but not much. Friday the 10 yr note pushed through 1.90%, a key technical resistance level. Stock indexes in pre-market opening were trading weaker supporting the bond market. In Europe over the weekend Greece and France voted out the leadership that drove the massive austerity plans that have crippled Europe. France elected Francois Hollande and ousted Sarkozy; Sarkozy and Germany’s Angela Merkel were the architects of the severe cuts in spending in the debt riddled countries of Greece, Portugal, Ireland, Italy and Spain that has routed what was left of the economies and driven unemployment to depressionary levels. The results of the elections in the two countries came after a tumultuous few weeks that saw the Dutch government fell as Britain’s conservative led coalition took a whipping in local elections. Most analysts believe voters in Europe are in favor of balanced budgets and good fiscal governance but the spending cuts are too severe and too quick. Germany and France, especially Germany, have forced unemployment higher and dealt the euro economy into a very deep recession.
Here in the US the stock market had a bad week last week and we expect additional selling this week as investors are increasingly concerned valuations in many of the “hot” issues have become too expensive. Europe’s recession is slowing China and investors see recent US data as evidence the US will slow. That the US will slow growth flies in the face of the most recent Fed forecasts; last week the Fed raised its outlook for GDP growth this year and next compared to their outlook in January. Uncertainty is the word of the moment.
At 9:30 the DJIA opened -46, NASDAQ -13, S&P -4; 10 yr note +2/32 at 1.87% -0.5% while mortgage prices up 2/32 (.06 bp).
This week Treasury will auction $72B of notes and bonds; $32B of 3 yr notes tomorrow, $24B of 10 yr notes on Wednesday and $16B of 30 yr bonds on Thursday. There isn’t much in the way of key economic releases this week. This afternoon at 3:00 March consumer credit; it is one our favorite reports each month although there isn’t a lot reaction when it hits. Credit is expected to have increased $11.0B after +$8.7B in Feb; our focus is on revolving credit (credit card usage) not so much on the headline. Consumer credit has been surging the last six months driven by non-revolving credit, credit in large part that's used to fund vehicle purchases. Revolving credit, which also turned higher late last year, has however been lagging and contracted slightly for a second month in a row.
Last Friday crude oil plunged $4.00, this morning down again now trading well under $100.00 (see below). Oil fell to the lowest level in more than four months after European election results fed speculation that austerity efforts will be derailed and weaker-than-expected jobs data underscored concern the U.S. economy may falter. Crude for June delivery plunged as much as $3.15 to $95.34 a barrel in electronic trading on the New York Mercantile Exchange early this morning. The contract tumbled $4.05 to $98.49 Friday, the lowest close since Feb. 7. Prices slumped 6.1% last week, the biggest weekly drop since September. Over the last three weeks crude as fallen from $104.00.
The remainder of the day will likely be directed by the stock market; the indexes are already off their opening levels. Like a broken record, the 10 yr has never traded below 1.90% for more than three days; the point being that the present levels of long term US rates should be monitored closely. We are not forecasting rates will increase, what we see though is that in the past the 10 yr and mortgages have run into solid resistance under 1.90% on the note.
Thursday, May 3, 2012
We have been saying it for months but people will look back and say,"I wish I had bought in 2012." NOW IS THE TIME!!
http://ping.fm/aWLKY
http://ping.fm/aWLKY
Mortgage Rates
A little weaker in the bond market early this morning with weekly jobless claims declining more than expected; forecasts were for claims to fall about 13K. As reported weekly claims declined 27K to 365K after last week’s claims were revised up by 4K from what was reported. Continuing claims fell a little at 3.276 mil frm 3.329 mil; the four week average increased to 388,50 frm 382,750 as claims increased the past few weeks. The decline in claims makes it more likely that the surge over the past three weeks was caused by the timing of the Easter holiday rather than a deterioration in employment. On the release the 10 yr note lost 7/32 to 1.95% +2 bp, mortgage prices opened unchanged then dropped 3/32 (.09 bp) at 8:45.
Q1 productivity was -0.5% as expected and Q1 unit labor costs were up 2.0% less than +2.8% expected. The productivity of U.S. workers fell indicating businesses are reaching the limit of how much efficiency they can wring from the workforce.
At 9:30 the DJIA opened fractionally higher, up 4 points even with Europe’s markets rallying and the better claims report. The 10 yr at 9:30 =6/32 at 1.95% +2 bp and MBS 30 yr prices -3/32 (.09 bp).
Nothing significant from the ECB meeting; European Central Bank President Draghi said policy makers didn’t discuss cutting interest rates today, and the economic outlook has become more uncertain. He spoke at a press conference after the ECB kept its main rate at 1.0%. Draghi is taking lessons from Bernanke on central bank speak; saying the economic outlook in Europe is uncertain suggests he has been sleeping recently, the outlook for Europe’s economy is clear, it is in recession and likely to decline further. Draghi said at a press conference in Barcelona today that there has been “significant progress” on the fiscal front. ?
At 10:00 the very key ISM services sector index, expected at 55.5 frm 56.0, immediately prior to the data the 10 yr, mortgages and the stock indexes traded unchanged. The index was weaker at 53.5; new orders at 53.6 frm 58.8, employment 54.2 frm 56.7 and prices pd at 53.6 frm 63.9. The immediate reaction to the weak report (the lowest index this year) pushed stock indexes down, the 10 yr came back to unchanged and MBS prices -3/32 (.09 bp) at 9:30 climbed to +2/32 (.06 bp), increasing .15 bp frm where morning prices were trading.
Tomorrow the April employment data is likely to keep UIS financial markets in check with not much change by the end of the day. Positioning ahead of employment data is a risky situation given the volatility and many times the data is well off what was thought. Traders usually don’t initiate new trades ahead of employment and investors normally don’t buy or sell much the day before the data.
The 10 yr note still unable to break 1.90% but not looking like rates want to increase. MBS prices also holding under their resistance at 104-3/32 (104.09 bp). (currently at 103-29/32, (103.90 bp)
A little weaker in the bond market early this morning with weekly jobless claims declining more than expected; forecasts were for claims to fall about 13K. As reported weekly claims declined 27K to 365K after last week’s claims were revised up by 4K from what was reported. Continuing claims fell a little at 3.276 mil frm 3.329 mil; the four week average increased to 388,50 frm 382,750 as claims increased the past few weeks. The decline in claims makes it more likely that the surge over the past three weeks was caused by the timing of the Easter holiday rather than a deterioration in employment. On the release the 10 yr note lost 7/32 to 1.95% +2 bp, mortgage prices opened unchanged then dropped 3/32 (.09 bp) at 8:45.
Q1 productivity was -0.5% as expected and Q1 unit labor costs were up 2.0% less than +2.8% expected. The productivity of U.S. workers fell indicating businesses are reaching the limit of how much efficiency they can wring from the workforce.
At 9:30 the DJIA opened fractionally higher, up 4 points even with Europe’s markets rallying and the better claims report. The 10 yr at 9:30 =6/32 at 1.95% +2 bp and MBS 30 yr prices -3/32 (.09 bp).
Nothing significant from the ECB meeting; European Central Bank President Draghi said policy makers didn’t discuss cutting interest rates today, and the economic outlook has become more uncertain. He spoke at a press conference after the ECB kept its main rate at 1.0%. Draghi is taking lessons from Bernanke on central bank speak; saying the economic outlook in Europe is uncertain suggests he has been sleeping recently, the outlook for Europe’s economy is clear, it is in recession and likely to decline further. Draghi said at a press conference in Barcelona today that there has been “significant progress” on the fiscal front. ?
At 10:00 the very key ISM services sector index, expected at 55.5 frm 56.0, immediately prior to the data the 10 yr, mortgages and the stock indexes traded unchanged. The index was weaker at 53.5; new orders at 53.6 frm 58.8, employment 54.2 frm 56.7 and prices pd at 53.6 frm 63.9. The immediate reaction to the weak report (the lowest index this year) pushed stock indexes down, the 10 yr came back to unchanged and MBS prices -3/32 (.09 bp) at 9:30 climbed to +2/32 (.06 bp), increasing .15 bp frm where morning prices were trading.
Tomorrow the April employment data is likely to keep UIS financial markets in check with not much change by the end of the day. Positioning ahead of employment data is a risky situation given the volatility and many times the data is well off what was thought. Traders usually don’t initiate new trades ahead of employment and investors normally don’t buy or sell much the day before the data.
The 10 yr note still unable to break 1.90% but not looking like rates want to increase. MBS prices also holding under their resistance at 104-3/32 (104.09 bp). (currently at 103-29/32, (103.90 bp)
Wednesday, May 2, 2012
Mortgage Rates
April ADP non-farm private jobs estimated at +186K yesterday, as reported at 8:15 jobs increased just 119K. Another huge miss by analysts and those that make those forecasts. The reaction is as you would expect, the 10 yr note rallying taking the interest rate to 1.90% at 9:00 this morning and mortgage prices +4/32 (.12 bp). Stock indexes, also as you would expect, down point to a weaker open at 9:30. According to ADP small businesses added 58K, medium size businesses +57K and large businesses -4K (small is 1 to 49 employees, medium 50 to 499K and large over than 499). Goods producing jobs declined 4K, services +123K , manufacturing -5K.
Prior to the ADP data the consensus estimates for Friday’s non-farm private jobs was +178K with a broad range as usual. Now what will estimates be for Friday’s BLS employment report? Over the previous six reports, ADP’s initial figure was closest to the Labor Department’s first estimate of private payrolls in October, when it overstated the gain in jobs by 6,000. The estimate was least accurate in December, when it overestimated the employment gain by 113,000.
The jobless rate in the 17-nation euro currency area increased to 10.9% in March from 10.8% in February, the European Union statistics office in Luxembourg said today. That’s the highest since April 1997. Separate reports showed euro-area manufacturing contracted more than initially estimated in April and unemployment in Germany, the region’s largest economy, unexpectedly increased. German unemployment unexpectedly rose in April as the debt crisis in the euro area constrained growth and hiring in Europe’s biggest economy. The number of people out of work increased a seasonally adjusted 19,000 to 2.87 million, the Federal Labor Agency in Nuremberg said today. The German jobless rate was unchanged at 6.8%, still a two-decade low, after the agency revised up figures for February and March.
Europe continues to drag the world down economically; the austerity plans jammed down the throats of countries with sovereign debt problems is back-firing in terms of economic health. Before it is over we expect huge push-backs from citizens as wages and jobs are falling like leaves in October. Germany continues to control the situation for now, protecting its wealth and not willing to allow itself to be dragged into the problem to deeply. Germany is the key to re-structuring what was said to be cast in stone a few months ago. It isn’t working though, and in the end the EU, ECB and IMF will have to re-think the debt issues otherwise Europe is headed to depression and likely riots in the streets across the region.
The MBA applications report. The Market Composite Index increased 0.1% on a seasonally adjusted basis from one week earlier. The Refinance Index decreased 0.7% from the previous week. The seasonally adjusted Purchase Index increased 2.9% from one week earlier. The refinance share of mortgage activity decreased to 72.6% of total applications from 73.4% the previous week. The government share of purchase applications remained steady at 37.0%. The government share of purchase applications over the last three weeks has been at the lowest level since 2009. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) increased to 4.05% from 4.04%, with points increasing to 0.44 from 0.40 (including the origination fee) for 80% loans. The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,500) increased to 4.32% from 4.27%, with points decreasing to 0.38 from 0.44 (including the origination fee) for 80% loans. The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 3.80%, the lowest rate in the history of the survey, from 3.81%, with points decreasing to 0.50 from 0.52 (including the origination fee) for 80% loans. The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.31%, the lowest rate in the history of the survey, from 3.32%, with points decreasing to 0.41 from 0.41 (including the origination fee) for 80% loans.
At 9:30 the DJIA opened -56, the US 10 yr at 1.91% and mortgage prices +5/32 (.15 bp).
At 10:00 March factory orders were expected to have declined 1.8% after increasing 1.3% in February. As released orders
The bellwether 10 yr still testing 1.90%, unable to break it so far. If the 10 does decline below 1.90% on strong volume, and is able to hold below for three days (something it has been unable to do since the recent rate declines that began last September), the next technical resistance is at 1.80%, then 1.70% the absolute low seen on Sept 23rd.
April ADP non-farm private jobs estimated at +186K yesterday, as reported at 8:15 jobs increased just 119K. Another huge miss by analysts and those that make those forecasts. The reaction is as you would expect, the 10 yr note rallying taking the interest rate to 1.90% at 9:00 this morning and mortgage prices +4/32 (.12 bp). Stock indexes, also as you would expect, down point to a weaker open at 9:30. According to ADP small businesses added 58K, medium size businesses +57K and large businesses -4K (small is 1 to 49 employees, medium 50 to 499K and large over than 499). Goods producing jobs declined 4K, services +123K , manufacturing -5K.
Prior to the ADP data the consensus estimates for Friday’s non-farm private jobs was +178K with a broad range as usual. Now what will estimates be for Friday’s BLS employment report? Over the previous six reports, ADP’s initial figure was closest to the Labor Department’s first estimate of private payrolls in October, when it overstated the gain in jobs by 6,000. The estimate was least accurate in December, when it overestimated the employment gain by 113,000.
The jobless rate in the 17-nation euro currency area increased to 10.9% in March from 10.8% in February, the European Union statistics office in Luxembourg said today. That’s the highest since April 1997. Separate reports showed euro-area manufacturing contracted more than initially estimated in April and unemployment in Germany, the region’s largest economy, unexpectedly increased. German unemployment unexpectedly rose in April as the debt crisis in the euro area constrained growth and hiring in Europe’s biggest economy. The number of people out of work increased a seasonally adjusted 19,000 to 2.87 million, the Federal Labor Agency in Nuremberg said today. The German jobless rate was unchanged at 6.8%, still a two-decade low, after the agency revised up figures for February and March.
Europe continues to drag the world down economically; the austerity plans jammed down the throats of countries with sovereign debt problems is back-firing in terms of economic health. Before it is over we expect huge push-backs from citizens as wages and jobs are falling like leaves in October. Germany continues to control the situation for now, protecting its wealth and not willing to allow itself to be dragged into the problem to deeply. Germany is the key to re-structuring what was said to be cast in stone a few months ago. It isn’t working though, and in the end the EU, ECB and IMF will have to re-think the debt issues otherwise Europe is headed to depression and likely riots in the streets across the region.
The MBA applications report. The Market Composite Index increased 0.1% on a seasonally adjusted basis from one week earlier. The Refinance Index decreased 0.7% from the previous week. The seasonally adjusted Purchase Index increased 2.9% from one week earlier. The refinance share of mortgage activity decreased to 72.6% of total applications from 73.4% the previous week. The government share of purchase applications remained steady at 37.0%. The government share of purchase applications over the last three weeks has been at the lowest level since 2009. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) increased to 4.05% from 4.04%, with points increasing to 0.44 from 0.40 (including the origination fee) for 80% loans. The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,500) increased to 4.32% from 4.27%, with points decreasing to 0.38 from 0.44 (including the origination fee) for 80% loans. The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 3.80%, the lowest rate in the history of the survey, from 3.81%, with points decreasing to 0.50 from 0.52 (including the origination fee) for 80% loans. The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.31%, the lowest rate in the history of the survey, from 3.32%, with points decreasing to 0.41 from 0.41 (including the origination fee) for 80% loans.
At 9:30 the DJIA opened -56, the US 10 yr at 1.91% and mortgage prices +5/32 (.15 bp).
At 10:00 March factory orders were expected to have declined 1.8% after increasing 1.3% in February. As released orders
The bellwether 10 yr still testing 1.90%, unable to break it so far. If the 10 does decline below 1.90% on strong volume, and is able to hold below for three days (something it has been unable to do since the recent rate declines that began last September), the next technical resistance is at 1.80%, then 1.70% the absolute low seen on Sept 23rd.
Tuesday, May 1, 2012
Mortgage Rates
Very early this morning the 10 yr traded unchanged but as the clock ticked some buying in the bond and mortgage markets with the stock indexes holding steady. At 9:00 the 10 yr at 1.90% +4/32, mortgage prices +3/32 (.09 bp). 1.90% on the 10 yr represents resistance based on past performance; the 10 has found difficulty at that level since last October. Only 10 days since then has the 10 traded below 1.90%.
For the first time since the start of 2008, bonds were the only investments to provide positive returns amid renewed concern the global economy is slowing and as widening deficits in Europe threaten contagion. Investors sought the perceived safety of fixed-income investments after U.S. job growth in March failed to meet economists’ forecasts and amid growing concerns that European leaders will fail to manage their debt loads. Austerity forced on governments in Europe is deepening the recession in the region. It forced Italy to delay its goal of balancing the budget by one year to 2014, joining Spain in missing fiscal targets amid a worsening recession. The IMF said in a recent report that the world economy will expand 3.5% this year, down from 3.9% in 2011, as growth in Europe shrinks 0.3%.
Everything looks positive for the US interest rate markets at the moment but most economists surveyed are forecasting the 10 yr note yield will be at 2.25% by the end of June; if they are correct, which can be debated, the mortgage market is at or close to its best levels for months to follow. Regardless of the forecasts, the present level of interest rates remains the best in 60 years. We hear a lot of talk that potential buyers of homes or those wanting to re-finance are waiting for rates to fall more. While anything in this climate is possible, the likelihood of substantially lower mortgage rates is remote. Mainly because at some point at these levels investors will realize that investing in very low interest rates is difficult to justify. The support in bonds now is two-fold; safety as Europe could blow up at any time and what looks like a decline in stocks is increasingly likely.
At 9:30 the DJIA opened generally unchanged from yesterday’s close ahead of the key ISM data and construction spending. The 10 yr +3/32 1.91% -.5 bp; mortgage prices +2/32 (.06 bp).
At 10:00 the April ISM manufacturing index was expected at 53.0 frm 53.4. The index jumped to 54.8 countering the various regional data frm Fed regions; employment increased to 57.3 frm 56.1, new orders increased to 58.2 frm 54.5 and prices pd was unchanged at 61.0. A minute before the 10:00 release the 10 yr note traded briefly at 1.90%, at 10:05 at 1.93% down 3/32 with mortgage prices -2/32 (.09 bp) and down 4/32 (.12 bp) frm 9:30. The key stock indexes were flat prior to the report, now up and improving. March construction spending didn’t meet forecasts, up 0.1% against estimates of +0.5%; residential construction up 0.7% after declining 2.2% in Feb. Government spending was weaker dragging spending lower, construction spending.
Earlier this morning two retail sales reports; Redbook's year-on-year rate is showing its steepest slowdown since early in the year, at plus 2.9% in the April 28 week with the four-week average down four tenths to plus 3.2%. But the downdraft reflects comparison distortions tied to the Easter shift, and a look at March and April together comes out to plus 3.4% which shows acceleration compared to plus 2.9% in February and plus 2.7% in January. The second report focuses on weather; cool temperatures and heavy weather through much of the country cut into store sales during the April 28 week, according to ICSC-Goldman whose same-store index slipped 0.3% in the week. Yet ICSC-Goldman's year-on-year rate remains firm, up six tenths to plus 4.2%. The four-week average is at plus 3.9% for the best rate since early in the year. Consumers still out there spending, although not heavily but with gasoline prices high we see the two reports as decent news.
April auto and truck sales are out through the day; expectations are for sales to have been up, some say as much as 10%.
So far this morning the 10 yr tested 1.90% and again failed to break it. At 10:10 1.94% +2 bp. The remainder of the day will be directed by how the stock market goes. Up a little on the 10:00 data but stalling out for the moment.
Very early this morning the 10 yr traded unchanged but as the clock ticked some buying in the bond and mortgage markets with the stock indexes holding steady. At 9:00 the 10 yr at 1.90% +4/32, mortgage prices +3/32 (.09 bp). 1.90% on the 10 yr represents resistance based on past performance; the 10 has found difficulty at that level since last October. Only 10 days since then has the 10 traded below 1.90%.
For the first time since the start of 2008, bonds were the only investments to provide positive returns amid renewed concern the global economy is slowing and as widening deficits in Europe threaten contagion. Investors sought the perceived safety of fixed-income investments after U.S. job growth in March failed to meet economists’ forecasts and amid growing concerns that European leaders will fail to manage their debt loads. Austerity forced on governments in Europe is deepening the recession in the region. It forced Italy to delay its goal of balancing the budget by one year to 2014, joining Spain in missing fiscal targets amid a worsening recession. The IMF said in a recent report that the world economy will expand 3.5% this year, down from 3.9% in 2011, as growth in Europe shrinks 0.3%.
Everything looks positive for the US interest rate markets at the moment but most economists surveyed are forecasting the 10 yr note yield will be at 2.25% by the end of June; if they are correct, which can be debated, the mortgage market is at or close to its best levels for months to follow. Regardless of the forecasts, the present level of interest rates remains the best in 60 years. We hear a lot of talk that potential buyers of homes or those wanting to re-finance are waiting for rates to fall more. While anything in this climate is possible, the likelihood of substantially lower mortgage rates is remote. Mainly because at some point at these levels investors will realize that investing in very low interest rates is difficult to justify. The support in bonds now is two-fold; safety as Europe could blow up at any time and what looks like a decline in stocks is increasingly likely.
At 9:30 the DJIA opened generally unchanged from yesterday’s close ahead of the key ISM data and construction spending. The 10 yr +3/32 1.91% -.5 bp; mortgage prices +2/32 (.06 bp).
At 10:00 the April ISM manufacturing index was expected at 53.0 frm 53.4. The index jumped to 54.8 countering the various regional data frm Fed regions; employment increased to 57.3 frm 56.1, new orders increased to 58.2 frm 54.5 and prices pd was unchanged at 61.0. A minute before the 10:00 release the 10 yr note traded briefly at 1.90%, at 10:05 at 1.93% down 3/32 with mortgage prices -2/32 (.09 bp) and down 4/32 (.12 bp) frm 9:30. The key stock indexes were flat prior to the report, now up and improving. March construction spending didn’t meet forecasts, up 0.1% against estimates of +0.5%; residential construction up 0.7% after declining 2.2% in Feb. Government spending was weaker dragging spending lower, construction spending.
Earlier this morning two retail sales reports; Redbook's year-on-year rate is showing its steepest slowdown since early in the year, at plus 2.9% in the April 28 week with the four-week average down four tenths to plus 3.2%. But the downdraft reflects comparison distortions tied to the Easter shift, and a look at March and April together comes out to plus 3.4% which shows acceleration compared to plus 2.9% in February and plus 2.7% in January. The second report focuses on weather; cool temperatures and heavy weather through much of the country cut into store sales during the April 28 week, according to ICSC-Goldman whose same-store index slipped 0.3% in the week. Yet ICSC-Goldman's year-on-year rate remains firm, up six tenths to plus 4.2%. The four-week average is at plus 3.9% for the best rate since early in the year. Consumers still out there spending, although not heavily but with gasoline prices high we see the two reports as decent news.
April auto and truck sales are out through the day; expectations are for sales to have been up, some say as much as 10%.
So far this morning the 10 yr tested 1.90% and again failed to break it. At 10:10 1.94% +2 bp. The remainder of the day will be directed by how the stock market goes. Up a little on the 10:00 data but stalling out for the moment.
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