Mortgage Rates
Anthony Hood
Equity Investment Capital
Office: 949-891-0067
Email: tony@equityinvestmentcapital.com
website: www.equityinvestmentcapital.com
Building Strong, Lasting Relationships; One Client at a Time.
Wednesday, February 02, 2011
Prior to 8:15 this morning treasuries and mortgages were doing a little better with US stock indexes slightly weaker after the strong rally yesterday. The 10 yr note at 8:00 +7/32 to 3.42% -2 bp and mortgages +4/32 (.12 bp). At 8:15 the infamous and market-unsettling ADP employment estimate for Jan; ADP was expected to show an increase of 140K/150K jobs, as reported up 187K. The ADP report on jobs in Dec sent markets scrambling when the company reported job growth of 297K, in the report this morning they revised it to 257K. After the huge miss on jobs in Dec (BLS reported 113K non-farm private jobs), most traders simply ignored the report as they should. Over the previous six reports, ADP’s initial figures were closest to the Labor Department’s first estimate of private payrolls in July, when it understated the gain in jobs by 29,000. The estimate was least accurate in December, when it overestimated the employment gain by 184,000.
Today’s ADP report showed an increase of 21,000 workers in goods-producing industries, which includes manufacturers and construction companies. Service providers added 166,000 workers. Employment at factories increased 19,000 jobs, ADP said. Companies employing more than 499 workers expanded their workforces by 11,000 jobs. Medium-sized businesses, with 50 to 499 employees, created 79,000 jobs and small companies increased payrolls by 97,000.
The "official" employment report hits on Friday; estimates are for an increase of 140K jobs. Already economists and analysts are hedging their estimates because of the weather issues that have hammered much of the east through Jan. One thing is likely, the actual report won't be near the estimates; either much stronger or much weaker, take your pick.
It is Wednesday; the MBA released its Weekly Mortgage Applications Survey for the week ending January 28, 2011. The Market Composite Index, a measure of mortgage loan application volume, increased 11.3%. The previous week did not include a holiday adjustment for Martin Luther King, Jr. Day. The Refinance Index increased 11.7% from the previous week. The seasonally adjusted Purchase Index increased 9.5% from one week earlier. The four week moving average for the seasonally adjusted Market Index is up 1.0%. The four week moving average is down 1.5% for the seasonally adjusted Purchase Index, while this average is up 1.7% for the Refinance Index. The refinance share of mortgage activity decreased to 69.3% of total applications from 70.3% the previous week. This is the lowest refinance share observed in the survey since the week ending May 14, 2010. The adjustable-rate mortgage (ARM) share of activity increased to 5.5% from 5.2% of total applications from the previous week. The average contract interest rate for 30-year fixed-rate mortgages increased to 4.81% from 4.80%, with points decreasing to 1.02 from 1.19 (including the origination fee) for 80% loans. The average contract interest rate for 15-year fixed-rate mortgages increased to 4.13% from 4.12%, with points decreasing to 1.01 from 1.26 (including the origination fee) for 80% loans.
At 9:15 Treasury announced the details of next week's quarterly refunding. Tuesday $32B of 3 yr notes, Wednesday $24B of 10 yr notes and Thursday $16B of 30 yr bonds. The total of $72B is in line with what dealers were expecting.
At 9:30 the DJIA opened down 21, the 10 yr note +6/32 3.42% -2 bp and mortgage prices +5/32 (.15 bp).
We are not expecting much for the rate markets today. Friday's Jan employment report looms and next week Treasury will conduct its quarterly refunding auctioning $72B of notes and bonds. By 10:00 the 10 yr and mortgages have already drifted off their best levels seen prior to 9:30 when the equity markets opened. The 10 still confined to its six week range, mortgages also stuck in their tight range keeping mortgage rates essentially unchanged for the past month. We continue our longer term bearish outlook for interest rates, the economic recovery is improving and inflation while not yet an issue, prices pd for commodities and energy are increasing and keeping investors and traders reluctant to press the bond market much.
Wednesday, February 2, 2011
Mortgag Rates
Anthony Hood
Equity Investment Capital
Office: 949-891-0067
Email: tony@equityinvestmentcapital.com
website: http://www.equityinvestmentcapital.com/
Building Strong, Lasting Relationships; One Client at a Time.
Wednesday, February 02, 2011
Prior to 8:15 this morning treasuries and mortgages were doing a little better with US stock indexes slightly weaker after the strong rally yesterday. The 10 yr note at 8:00 +7/32 to 3.42% -2 bp and mortgages +4/32 (.12 bp). At 8:15 the infamous and market-unsettling ADP employment estimate for Jan; ADP was expected to show an increase of 140K/150K jobs, as reported up 187K. The ADP report on jobs in Dec sent markets scrambling when the company reported job growth of 297K, in the report this morning they revised it to 257K. After the huge miss on jobs in Dec (BLS reported 113K non-farm private jobs), most traders simply ignored the report as they should. Over the previous six reports, ADP’s initial figures were closest to the Labor Department’s first estimate of private payrolls in July, when it understated the gain in jobs by 29,000. The estimate was least accurate in December, when it overestimated the employment gain by 184,000.
Today’s ADP report showed an increase of 21,000 workers in goods-producing industries, which includes manufacturers and construction companies. Service providers added 166,000 workers. Employment at factories increased 19,000 jobs, ADP said. Companies employing more than 499 workers expanded their workforces by 11,000 jobs. Medium-sized businesses, with 50 to 499 employees, created 79,000 jobs and small companies increased payrolls by 97,000.
The "official" employment report hits on Friday; estimates are for an increase of 140K jobs. Already economists and analysts are hedging their estimates because of the weather issues that have hammered much of the east through Jan. One thing is likely, the actual report won't be near the estimates; either much stronger or much weaker, take your pick.
It is Wednesday; the MBA released its Weekly Mortgage Applications Survey for the week ending January 28, 2011. The Market Composite Index, a measure of mortgage loan application volume, increased 11.3%. The previous week did not include a holiday adjustment for Martin Luther King, Jr. Day. The Refinance Index increased 11.7% from the previous week. The seasonally adjusted Purchase Index increased 9.5% from one week earlier. The four week moving average for the seasonally adjusted Market Index is up 1.0%. The four week moving average is down 1.5% for the seasonally adjusted Purchase Index, while this average is up 1.7% for the Refinance Index. The refinance share of mortgage activity decreased to 69.3% of total applications from 70.3% the previous week. This is the lowest refinance share observed in the survey since the week ending May 14, 2010. The adjustable-rate mortgage (ARM) share of activity increased to 5.5% from 5.2% of total applications from the previous week. The average contract interest rate for 30-year fixed-rate mortgages increased to 4.81% from 4.80%, with points decreasing to 1.02 from 1.19 (including the origination fee) for 80% loans. The average contract interest rate for 15-year fixed-rate mortgages increased to 4.13% from 4.12%, with points decreasing to 1.01 from 1.26 (including the origination fee) for 80% loans.
At 9:15 Treasury announced the details of next week's quarterly refunding. Tuesday $32B of 3 yr notes, Wednesday $24B of 10 yr notes and Thursday $16B of 30 yr bonds. The total of $72B is in line with what dealers were expecting.
At 9:30 the DJIA opened down 21, the 10 yr note +6/32 3.42% -2 bp and mortgage prices +5/32 (.15 bp).
We are not expecting much for the rate markets today. Friday's Jan employment report looms and next week Treasury will conduct its quarterly refunding auctioning $72B of notes and bonds. By 10:00 the 10 yr and mortgages have already drifted off their best levels seen prior to 9:30 when the equity markets opened. The 10 still confined to its six week range, mortgages also stuck in their tight range keeping mortgage rates essentially unchanged for the past month. We continue our longer term bearish outlook for interest rates, the economic recovery is improving and inflation while not yet an issue, prices pd for commodities and energy are increasing and keeping investors and traders reluctant to press the bond market much.
Equity Investment Capital
Office: 949-891-0067
Email: tony@equityinvestmentcapital.com
website: http://www.equityinvestmentcapital.com/
Building Strong, Lasting Relationships; One Client at a Time.
Wednesday, February 02, 2011
Prior to 8:15 this morning treasuries and mortgages were doing a little better with US stock indexes slightly weaker after the strong rally yesterday. The 10 yr note at 8:00 +7/32 to 3.42% -2 bp and mortgages +4/32 (.12 bp). At 8:15 the infamous and market-unsettling ADP employment estimate for Jan; ADP was expected to show an increase of 140K/150K jobs, as reported up 187K. The ADP report on jobs in Dec sent markets scrambling when the company reported job growth of 297K, in the report this morning they revised it to 257K. After the huge miss on jobs in Dec (BLS reported 113K non-farm private jobs), most traders simply ignored the report as they should. Over the previous six reports, ADP’s initial figures were closest to the Labor Department’s first estimate of private payrolls in July, when it understated the gain in jobs by 29,000. The estimate was least accurate in December, when it overestimated the employment gain by 184,000.
Today’s ADP report showed an increase of 21,000 workers in goods-producing industries, which includes manufacturers and construction companies. Service providers added 166,000 workers. Employment at factories increased 19,000 jobs, ADP said. Companies employing more than 499 workers expanded their workforces by 11,000 jobs. Medium-sized businesses, with 50 to 499 employees, created 79,000 jobs and small companies increased payrolls by 97,000.
The "official" employment report hits on Friday; estimates are for an increase of 140K jobs. Already economists and analysts are hedging their estimates because of the weather issues that have hammered much of the east through Jan. One thing is likely, the actual report won't be near the estimates; either much stronger or much weaker, take your pick.
It is Wednesday; the MBA released its Weekly Mortgage Applications Survey for the week ending January 28, 2011. The Market Composite Index, a measure of mortgage loan application volume, increased 11.3%. The previous week did not include a holiday adjustment for Martin Luther King, Jr. Day. The Refinance Index increased 11.7% from the previous week. The seasonally adjusted Purchase Index increased 9.5% from one week earlier. The four week moving average for the seasonally adjusted Market Index is up 1.0%. The four week moving average is down 1.5% for the seasonally adjusted Purchase Index, while this average is up 1.7% for the Refinance Index. The refinance share of mortgage activity decreased to 69.3% of total applications from 70.3% the previous week. This is the lowest refinance share observed in the survey since the week ending May 14, 2010. The adjustable-rate mortgage (ARM) share of activity increased to 5.5% from 5.2% of total applications from the previous week. The average contract interest rate for 30-year fixed-rate mortgages increased to 4.81% from 4.80%, with points decreasing to 1.02 from 1.19 (including the origination fee) for 80% loans. The average contract interest rate for 15-year fixed-rate mortgages increased to 4.13% from 4.12%, with points decreasing to 1.01 from 1.26 (including the origination fee) for 80% loans.
At 9:15 Treasury announced the details of next week's quarterly refunding. Tuesday $32B of 3 yr notes, Wednesday $24B of 10 yr notes and Thursday $16B of 30 yr bonds. The total of $72B is in line with what dealers were expecting.
At 9:30 the DJIA opened down 21, the 10 yr note +6/32 3.42% -2 bp and mortgage prices +5/32 (.15 bp).
We are not expecting much for the rate markets today. Friday's Jan employment report looms and next week Treasury will conduct its quarterly refunding auctioning $72B of notes and bonds. By 10:00 the 10 yr and mortgages have already drifted off their best levels seen prior to 9:30 when the equity markets opened. The 10 still confined to its six week range, mortgages also stuck in their tight range keeping mortgage rates essentially unchanged for the past month. We continue our longer term bearish outlook for interest rates, the economic recovery is improving and inflation while not yet an issue, prices pd for commodities and energy are increasing and keeping investors and traders reluctant to press the bond market much.
Tuesday, February 1, 2011
Mortgage Rates
Anthony Hood
Equity Investment Capital
Office: 949-891-0067
Email: tony@equityinvestmentcapital.com
website: www.equityinvestmentcapital.com
Building Strong, Lasting Relationships; One Client at a Time.
Tuesday, February 01, 2011
More selling in the bond and mortgage markets this morning; at 8:30 the 10 yr note -15/32 at 3.43% +5 bp and mortgage prices -11/32 (.34 bp). Yesterday the 10 declined 11/32 to 3.38% +5 bp, mortgage markets held well against treasuries, off just 4/32 (.12 bp) in price. The stock market managed a gain yesterday after the 166 point decline in the DJIA on Friday; better economic data continues to fortify investors. Dec personal spending yesterday was better than what was thought and the Chicago purchasing mgrs index was the highest since July 1998.
At 9:30 the DJIA opened 43 points higher ahead of the ISM manufacturing report. The 10 yr note at 9:30 -16/32 3.44% +6 bp and mortgage prices -11/32 (.34 bp).
This morning two reports hit at 10:00; the Jan ISM national manufacturing index, expected at 58.0 frm 57.0 in Dec.The overall index increased to 60.8, the highest since 2004; the sub components were also much better. New orders index at 67.8 frm 62.0, prices pd really is increasing, 81.5 frm 72.5 and employment increased to 61.7 frm 58.9. Any reading over 50 is considered expansion. The initial reaction sent interest rate markets lower in price after already being substantially lower early.
U.K. manufacturing grew at a record pace in January as domestic and export demand boosted orders. The gauge based on a survey of companies by Markit Economics and the Chartered Institute of Purchasing and Supply surged to 62 from a revised 58.7 in December, like the US ISM manufacturing index, any read over 50 is considered expansion.
Also at 10:00 Dec construction spending, the estimate is an increase of 0.2%; late last week estimates were for a decline of 0.5%. As released spending fell 2.5%. Traders not concerned with it as the ISM data overrides the volatile construction spending.
Retail sales in Jan have been negatively impacted by bad weather; the Johnson Redbook US chain store sales for Jan were down 0.9% frm Dec, sales were up 1.8% however from a year ago. Another retail sales report, the ICSC-Goldman store sales confirmed the weather related decline in Jan; sales were 1.0% in Jan but up 1.6% from Jan 2010. The measure of comparable store sales at major retail chains, published by the International Council of Shopping Centers, is related to the general merchandise portion of retail sales. It accounts for roughly 10% of total retail sales. We were looking for Jan sales as confirmation of the pace of recovery, unfortunately weather has made the data less reliable.
Germany reported an increase in employment; unemployment fell to an 18- year low in January. The number of people out of work declined a seasonally adjusted 13,000 to 3.135 million, the lowest since November 1992, the Nuremberg-based Federal Labor Agency said today. Economists forecast a drop of 10,000, according to the median of 32 estimates in a Bloomberg News survey. The adjusted jobless rate fell to 7.4% from 7.5%. Friday we get the Jan US employment data, expectations now are for NFP jobs to have increased 150K with private jobs up 163K, the unemployment rate at 9.5% +0.1%.
Although the economy is gaining momentum there is no reason to fear inflation, the key reason US interest rates remain very stable over the past six weeks after the spike in Nov and early Dec. The Fed continues its $600B purchases of US treasuries and additional Treasury buying using the repayments from the $1.25T MBS buying binge a year ago. That the Fed is buying almost the equivalent of all recent Treasury borrowing has kept rates from increasing. Mortgage interest rates have kept within a narrow 10 basis point range for 30 yr rates; as long as the 10 yr note doesn't move above 3.50% (currently 3.44%) mortgage rates will remain generally unchanged.
Anthony Hood
Equity Investment Capital
Office: 949-891-0067
Email: tony@equityinvestmentcapital.com
website: www.equityinvestmentcapital.com
Building Strong, Lasting Relationships; One Client at a Time.
Tuesday, February 01, 2011
More selling in the bond and mortgage markets this morning; at 8:30 the 10 yr note -15/32 at 3.43% +5 bp and mortgage prices -11/32 (.34 bp). Yesterday the 10 declined 11/32 to 3.38% +5 bp, mortgage markets held well against treasuries, off just 4/32 (.12 bp) in price. The stock market managed a gain yesterday after the 166 point decline in the DJIA on Friday; better economic data continues to fortify investors. Dec personal spending yesterday was better than what was thought and the Chicago purchasing mgrs index was the highest since July 1998.
At 9:30 the DJIA opened 43 points higher ahead of the ISM manufacturing report. The 10 yr note at 9:30 -16/32 3.44% +6 bp and mortgage prices -11/32 (.34 bp).
This morning two reports hit at 10:00; the Jan ISM national manufacturing index, expected at 58.0 frm 57.0 in Dec.The overall index increased to 60.8, the highest since 2004; the sub components were also much better. New orders index at 67.8 frm 62.0, prices pd really is increasing, 81.5 frm 72.5 and employment increased to 61.7 frm 58.9. Any reading over 50 is considered expansion. The initial reaction sent interest rate markets lower in price after already being substantially lower early.
U.K. manufacturing grew at a record pace in January as domestic and export demand boosted orders. The gauge based on a survey of companies by Markit Economics and the Chartered Institute of Purchasing and Supply surged to 62 from a revised 58.7 in December, like the US ISM manufacturing index, any read over 50 is considered expansion.
Also at 10:00 Dec construction spending, the estimate is an increase of 0.2%; late last week estimates were for a decline of 0.5%. As released spending fell 2.5%. Traders not concerned with it as the ISM data overrides the volatile construction spending.
Retail sales in Jan have been negatively impacted by bad weather; the Johnson Redbook US chain store sales for Jan were down 0.9% frm Dec, sales were up 1.8% however from a year ago. Another retail sales report, the ICSC-Goldman store sales confirmed the weather related decline in Jan; sales were 1.0% in Jan but up 1.6% from Jan 2010. The measure of comparable store sales at major retail chains, published by the International Council of Shopping Centers, is related to the general merchandise portion of retail sales. It accounts for roughly 10% of total retail sales. We were looking for Jan sales as confirmation of the pace of recovery, unfortunately weather has made the data less reliable.
Germany reported an increase in employment; unemployment fell to an 18- year low in January. The number of people out of work declined a seasonally adjusted 13,000 to 3.135 million, the lowest since November 1992, the Nuremberg-based Federal Labor Agency said today. Economists forecast a drop of 10,000, according to the median of 32 estimates in a Bloomberg News survey. The adjusted jobless rate fell to 7.4% from 7.5%. Friday we get the Jan US employment data, expectations now are for NFP jobs to have increased 150K with private jobs up 163K, the unemployment rate at 9.5% +0.1%.
Although the economy is gaining momentum there is no reason to fear inflation, the key reason US interest rates remain very stable over the past six weeks after the spike in Nov and early Dec. The Fed continues its $600B purchases of US treasuries and additional Treasury buying using the repayments from the $1.25T MBS buying binge a year ago. That the Fed is buying almost the equivalent of all recent Treasury borrowing has kept rates from increasing. Mortgage interest rates have kept within a narrow 10 basis point range for 30 yr rates; as long as the 10 yr note doesn't move above 3.50% (currently 3.44%) mortgage rates will remain generally unchanged.
Mortgage Rates
Anthony Hood
Equity Investment Capital
Office: 949-891-0067
Email: tony@equityinvestmentcapital.com
website: http://www.equityinvestmentcapital.com/
Building Strong, Lasting Relationships; One Client at a Time.
Tuesday, February 01, 2011
More selling in the bond and mortgage markets this morning; at 8:30 the 10 yr note -15/32 at 3.43% +5 bp and mortgage prices -11/32 (.34 bp). Yesterday the 10 declined 11/32 to 3.38% +5 bp, mortgage markets held well against treasuries, off just 4/32 (.12 bp) in price. The stock market managed a gain yesterday after the 166 point decline in the DJIA on Friday; better economic data continues to fortify investors. Dec personal spending yesterday was better than what was thought and the Chicago purchasing mgrs index was the highest since July 1998.
At 9:30 the DJIA opened 43 points higher ahead of the ISM manufacturing report. The 10 yr note at 9:30 -16/32 3.44% +6 bp and mortgage prices -11/32 (.34 bp).
This morning two reports hit at 10:00; the Jan ISM national manufacturing index, expected at 58.0 frm 57.0 in Dec.The overall index increased to 60.8, the highest since 2004; the sub components were also much better. New orders index at 67.8 frm 62.0, prices pd really is increasing, 81.5 frm 72.5 and employment increased to 61.7 frm 58.9. Any reading over 50 is considered expansion. The initial reaction sent interest rate markets lower in price after already being substantially lower early.
U.K. manufacturing grew at a record pace in January as domestic and export demand boosted orders. The gauge based on a survey of companies by Markit Economics and the Chartered Institute of Purchasing and Supply surged to 62 from a revised 58.7 in December, like the US ISM manufacturing index, any read over 50 is considered expansion.
Also at 10:00 Dec construction spending, the estimate is an increase of 0.2%; late last week estimates were for a decline of 0.5%. As released spending fell 2.5%. Traders not concerned with it as the ISM data overrides the volatile construction spending.
Retail sales in Jan have been negatively impacted by bad weather; the Johnson Redbook US chain store sales for Jan were down 0.9% frm Dec, sales were up 1.8% however from a year ago. Another retail sales report, the ICSC-Goldman store sales confirmed the weather related decline in Jan; sales were 1.0% in Jan but up 1.6% from Jan 2010. The measure of comparable store sales at major retail chains, published by the International Council of Shopping Centers, is related to the general merchandise portion of retail sales. It accounts for roughly 10% of total retail sales. We were looking for Jan sales as confirmation of the pace of recovery, unfortunately weather has made the data less reliable.
Germany reported an increase in employment; unemployment fell to an 18- year low in January. The number of people out of work declined a seasonally adjusted 13,000 to 3.135 million, the lowest since November 1992, the Nuremberg-based Federal Labor Agency said today. Economists forecast a drop of 10,000, according to the median of 32 estimates in a Bloomberg News survey. The adjusted jobless rate fell to 7.4% from 7.5%. Friday we get the Jan US employment data, expectations now are for NFP jobs to have increased 150K with private jobs up 163K, the unemployment rate at 9.5% +0.1%.
Although the economy is gaining momentum there is no reason to fear inflation, the key reason US interest rates remain very stable over the past six weeks after the spike in Nov and early Dec. The Fed continues its $600B purchases of US treasuries and additional Treasury buying using the repayments from the $1.25T MBS buying binge a year ago. That the Fed is buying almost the equivalent of all recent Treasury borrowing has kept rates from increasing. Mortgage interest rates have kept within a narrow 10 basis point range for 30 yr rates; as long as the 10 yr note doesn't move above 3.50% (currently 3.44%) mortgage rates will remain generally unchanged.
Equity Investment Capital
Office: 949-891-0067
Email: tony@equityinvestmentcapital.com
website: http://www.equityinvestmentcapital.com/
Building Strong, Lasting Relationships; One Client at a Time.
Tuesday, February 01, 2011
More selling in the bond and mortgage markets this morning; at 8:30 the 10 yr note -15/32 at 3.43% +5 bp and mortgage prices -11/32 (.34 bp). Yesterday the 10 declined 11/32 to 3.38% +5 bp, mortgage markets held well against treasuries, off just 4/32 (.12 bp) in price. The stock market managed a gain yesterday after the 166 point decline in the DJIA on Friday; better economic data continues to fortify investors. Dec personal spending yesterday was better than what was thought and the Chicago purchasing mgrs index was the highest since July 1998.
At 9:30 the DJIA opened 43 points higher ahead of the ISM manufacturing report. The 10 yr note at 9:30 -16/32 3.44% +6 bp and mortgage prices -11/32 (.34 bp).
This morning two reports hit at 10:00; the Jan ISM national manufacturing index, expected at 58.0 frm 57.0 in Dec.The overall index increased to 60.8, the highest since 2004; the sub components were also much better. New orders index at 67.8 frm 62.0, prices pd really is increasing, 81.5 frm 72.5 and employment increased to 61.7 frm 58.9. Any reading over 50 is considered expansion. The initial reaction sent interest rate markets lower in price after already being substantially lower early.
U.K. manufacturing grew at a record pace in January as domestic and export demand boosted orders. The gauge based on a survey of companies by Markit Economics and the Chartered Institute of Purchasing and Supply surged to 62 from a revised 58.7 in December, like the US ISM manufacturing index, any read over 50 is considered expansion.
Also at 10:00 Dec construction spending, the estimate is an increase of 0.2%; late last week estimates were for a decline of 0.5%. As released spending fell 2.5%. Traders not concerned with it as the ISM data overrides the volatile construction spending.
Retail sales in Jan have been negatively impacted by bad weather; the Johnson Redbook US chain store sales for Jan were down 0.9% frm Dec, sales were up 1.8% however from a year ago. Another retail sales report, the ICSC-Goldman store sales confirmed the weather related decline in Jan; sales were 1.0% in Jan but up 1.6% from Jan 2010. The measure of comparable store sales at major retail chains, published by the International Council of Shopping Centers, is related to the general merchandise portion of retail sales. It accounts for roughly 10% of total retail sales. We were looking for Jan sales as confirmation of the pace of recovery, unfortunately weather has made the data less reliable.
Germany reported an increase in employment; unemployment fell to an 18- year low in January. The number of people out of work declined a seasonally adjusted 13,000 to 3.135 million, the lowest since November 1992, the Nuremberg-based Federal Labor Agency said today. Economists forecast a drop of 10,000, according to the median of 32 estimates in a Bloomberg News survey. The adjusted jobless rate fell to 7.4% from 7.5%. Friday we get the Jan US employment data, expectations now are for NFP jobs to have increased 150K with private jobs up 163K, the unemployment rate at 9.5% +0.1%.
Although the economy is gaining momentum there is no reason to fear inflation, the key reason US interest rates remain very stable over the past six weeks after the spike in Nov and early Dec. The Fed continues its $600B purchases of US treasuries and additional Treasury buying using the repayments from the $1.25T MBS buying binge a year ago. That the Fed is buying almost the equivalent of all recent Treasury borrowing has kept rates from increasing. Mortgage interest rates have kept within a narrow 10 basis point range for 30 yr rates; as long as the 10 yr note doesn't move above 3.50% (currently 3.44%) mortgage rates will remain generally unchanged.
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