Mortgage Rate Update
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Tuesday, June 7, 2011
Monday, June 6, 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.
Monday, June 06, 2011
Treasuries and mortgages opened weaker this morning, the stock market trade in pre-market opening also looking weak. If the stock market (DJIA) ends this week lower it will be the first time since 2002 the key index closes lower for 7 consecutive weeks. There are no economic reports today and through the week there isn't much data to look at. The week has treasury auctioning $66B of notes and bonds. OPEC will meet Wednesday with the Saudis pushing for more production, crude oil this morning trading lower on the OPEC outlook.
Bernanke is scheduled to speak tomorrow, may talk about the Fed's new economic outlook that has been lowered recently. Some talk about another QE but we don't expect the Fed will do another easing similar to QE 2 in which the Fed bought $600B of treasuries (the program will end at the end of this month). The easing move didn't come close to helping the economic recovery as recent evidence clearly shows; the Fed in our opinion is out of bullets. If there is going to be any additional help for the recovery it has to come from the fiscal side (Congress and the Administration), both of which have so far shown little understanding about what to do.
Federal Reserve Bank of Philadelphia President Charles Plosser said an exit from stimulus measures should start “long before” a recovery in the U.S. jobs market is assured. “Somewhat tighter monetary policy is possible by the end of the year,” he said today at a press conference. “We will have to begin exiting from our policies long before the unemployment rate is down to what people would like to have. That’s going to be a difficult decision.”
Every move out of Washington since the economic decline has been mis-guided and has served to drag recovery on and on. The foremost mistake; tying the hands of FNMA and Freddie, when the economy needs help in the housing sector (one of the key reasons consumers are not supporting the economy), Congress and this Administration have yanked the GSEs back. The so-called private MBS markets have tightened credit underwriting, want to increase down payments, and lower loan limits. Every thing that has come from Washington since the sub-prime crisis has been either meaningless or has added to the problems. At a time when the government needs to be there it has been shut down. Politicians didn't heed warnings that sub-prime was headed off a cliff, can we expect them to understand what has to occur now? In total they have little understanding, as long as housing markets remain as soft as they are there is no reason to believe the economy will rebound much.
At 9:30 the DJIA opened -25, the 10 yr note -12/32 at 3.04%; mtg prices -8/32 (.25 bp) frm Friday's close.
This Week's Economic Calendar:
Tuesday;
1:00 pm $32B 3 yr note auction
3:00 pm April consumer credit (+$6.0B; this is one of our key data points)
Wednesday;
7:00 am MBA mortgage applications
1:00 pm $21B 10 yr note auction
2:00 pm Fed Beige Book
Thursday;
8:30 am weekly jobless claims (+5K to 427K; cont claims 3.688 mil frm 3.711 mil)
Apr trade balance (-$48.5B)
10:00 am Apr wholesale inventories (+0.9%)
1:00 pm $13B 30 yr bond auction
Friday;
8:30 am May import and export prices (imports -0.7%, exports +0.3%)
2:00 pm May Treasury budget (-$135B)
The bond and mortgage markets under pressure early this morning with the 10 yr note working both sides of 3.00%. Treasuries are working higher n rates with Treasury auctions beginning tomorrow. The lower rates occurring with safety buying as investors lighten up on equities. Mortgage rates working lower but last week were soft compared to the 10 yr note. Mtg markets have to contend with a softer economic outlook now, treasuries likely to out-perform MBSs this week.
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.
Monday, June 06, 2011
Treasuries and mortgages opened weaker this morning, the stock market trade in pre-market opening also looking weak. If the stock market (DJIA) ends this week lower it will be the first time since 2002 the key index closes lower for 7 consecutive weeks. There are no economic reports today and through the week there isn't much data to look at. The week has treasury auctioning $66B of notes and bonds. OPEC will meet Wednesday with the Saudis pushing for more production, crude oil this morning trading lower on the OPEC outlook.
Bernanke is scheduled to speak tomorrow, may talk about the Fed's new economic outlook that has been lowered recently. Some talk about another QE but we don't expect the Fed will do another easing similar to QE 2 in which the Fed bought $600B of treasuries (the program will end at the end of this month). The easing move didn't come close to helping the economic recovery as recent evidence clearly shows; the Fed in our opinion is out of bullets. If there is going to be any additional help for the recovery it has to come from the fiscal side (Congress and the Administration), both of which have so far shown little understanding about what to do.
Federal Reserve Bank of Philadelphia President Charles Plosser said an exit from stimulus measures should start “long before” a recovery in the U.S. jobs market is assured. “Somewhat tighter monetary policy is possible by the end of the year,” he said today at a press conference. “We will have to begin exiting from our policies long before the unemployment rate is down to what people would like to have. That’s going to be a difficult decision.”
Every move out of Washington since the economic decline has been mis-guided and has served to drag recovery on and on. The foremost mistake; tying the hands of FNMA and Freddie, when the economy needs help in the housing sector (one of the key reasons consumers are not supporting the economy), Congress and this Administration have yanked the GSEs back. The so-called private MBS markets have tightened credit underwriting, want to increase down payments, and lower loan limits. Every thing that has come from Washington since the sub-prime crisis has been either meaningless or has added to the problems. At a time when the government needs to be there it has been shut down. Politicians didn't heed warnings that sub-prime was headed off a cliff, can we expect them to understand what has to occur now? In total they have little understanding, as long as housing markets remain as soft as they are there is no reason to believe the economy will rebound much.
At 9:30 the DJIA opened -25, the 10 yr note -12/32 at 3.04%; mtg prices -8/32 (.25 bp) frm Friday's close.
This Week's Economic Calendar:
Tuesday;
1:00 pm $32B 3 yr note auction
3:00 pm April consumer credit (+$6.0B; this is one of our key data points)
Wednesday;
7:00 am MBA mortgage applications
1:00 pm $21B 10 yr note auction
2:00 pm Fed Beige Book
Thursday;
8:30 am weekly jobless claims (+5K to 427K; cont claims 3.688 mil frm 3.711 mil)
Apr trade balance (-$48.5B)
10:00 am Apr wholesale inventories (+0.9%)
1:00 pm $13B 30 yr bond auction
Friday;
8:30 am May import and export prices (imports -0.7%, exports +0.3%)
2:00 pm May Treasury budget (-$135B)
The bond and mortgage markets under pressure early this morning with the 10 yr note working both sides of 3.00%. Treasuries are working higher n rates with Treasury auctions beginning tomorrow. The lower rates occurring with safety buying as investors lighten up on equities. Mortgage rates working lower but last week were soft compared to the 10 yr note. Mtg markets have to contend with a softer economic outlook now, treasuries likely to out-perform MBSs this week.
Mortgage Market
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.
Monday, June 06, 2011
This Week; the stock market will continue to struggle after the very weak employment report last Friday and all recent data that is confirming a slowdown in growth. The bond and mortgage markets will benefit as long as the outlook for the economy is expected to slip back. The 10 yr note is working on the psychological 3.00% level, to push yields lower it will take continuing declines in the equity markets. Another weekly lower lose in the stock market will make it six weeks in a row, not seen since back in 2002.
This week there is much in the way of economic data; Treasury will auction a total of $66b of notes and bonds beginning Tuesday through Thursday ($32B 3 yr, $21B 10 yr and $13B of 30 yr). The auctions will likely go well as most have in the last few months; however, there is always some concern that should keep interest rates frm improving much until the demand for the 10 yr note on Wednesday is measured. OPEC will meet on Wednesday with the Saudis wanting to push production higher, crude will likely trade lower in the meantime. While we continue to look for somewhat lower interest rates, this week may not provide much improvement. Technically the rate markets are overbought and likely will consolidate here for awhile. Early Monday rate markets were a little weaker with stock indexes also pointing to a lower open.
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.
Monday, June 06, 2011
This Week; the stock market will continue to struggle after the very weak employment report last Friday and all recent data that is confirming a slowdown in growth. The bond and mortgage markets will benefit as long as the outlook for the economy is expected to slip back. The 10 yr note is working on the psychological 3.00% level, to push yields lower it will take continuing declines in the equity markets. Another weekly lower lose in the stock market will make it six weeks in a row, not seen since back in 2002.
This week there is much in the way of economic data; Treasury will auction a total of $66b of notes and bonds beginning Tuesday through Thursday ($32B 3 yr, $21B 10 yr and $13B of 30 yr). The auctions will likely go well as most have in the last few months; however, there is always some concern that should keep interest rates frm improving much until the demand for the 10 yr note on Wednesday is measured. OPEC will meet on Wednesday with the Saudis wanting to push production higher, crude will likely trade lower in the meantime. While we continue to look for somewhat lower interest rates, this week may not provide much improvement. Technically the rate markets are overbought and likely will consolidate here for awhile. Early Monday rate markets were a little weaker with stock indexes also pointing to a lower open.
Thursday, June 2, 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.
Thursday, June 02, 2011
Not necessarily surprising that interest rate markets are seeing a little push back this morning after the strong rallies yesterday in treasuries and mortgages. That rates are slightly higher this morning have little to do with the larger picture, the US economy is slipping back and likely will weaken through the rest of the year. If not weaken, the best we can see is stagnant economic growth. At 8:30 weekly jobless claims were down 6K to 428K, another less than expected report; claims were expected at 413K. Continuing claims at 3.71 mil frm 3.712 mil. Claims remain high, unemployment isn't declining.
At 8:30 revisions of Q1 productivity and unit labor costs; productivity at +1.8% frm +1.6% and unit labor costs +0.7% frm +1.0%. Old data that shouldn't have much impact on markets.
Today will be about tomorrow's May employment report, until yesterday's very weak ADP private jobs numbers (+38K with forecasts of +177K) the estimates for tomorrow's non-farm private jobs were in the range of 200K. After the ADP report consensus estimates were quickly revised to +120K levels. Always a crap shoot when anticipating jobs, this time is even more tedious. Traders and investors will adjust positions through the day to where they have comfort into employment; comfort is an oxymoron when it comes to the monthly employment however.
There shouldn't be much arguments now that the US economy is softening; all data over the past month has confirmed it and makes it more difficult to defend those optimistic forecasts that generally come from firms that benefit from better outlooks. There will be increasing debate now whether the Fed will do another QE move; the problem is the QE 2 $600B bond buying that ends at the end of this month didn't do anything to help the economy. While the bond-purchase program did push investors into higher-yielding assets such as stocks, the “transmission mechanism” to drive more money into the economy didn’t work. Another easing move from the Fed won't help either. There isn't much the Fed can do that it hasn't already tried and failed. It is all about the consumer and spending, consumers are not about to increase discretionary spending with high energy prices, declining home prices and uncertain employment outlooks. Amazing how the establishment doesn't understand it.
At 9:30 the DJIA opened +5, the 10 yr -14/32 2.99% +4 bp and mortgage prices -10/32 (.31 bp). Within a few minutes after the open the DJIA went negative, at 9:40 -11.
At 10:00 April factory orders, expected down 1.0%, were down 1.2%; April durable goods orders unchanged at -3.6%. No initial reaction.
Look for the day to be relatively quiet with interest rates slightly weaker and equity market indexes hanging around unchanged. Tomorrow's 8:30 May employment report should keep traders from being aggressive in either direction. Yesterday's strong rally in the bond and mortgage markets pushed the 10 yr RSI into overbought levels and betting heavily on the data tomorrow is a fool's errand.
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.
Thursday, June 02, 2011
Not necessarily surprising that interest rate markets are seeing a little push back this morning after the strong rallies yesterday in treasuries and mortgages. That rates are slightly higher this morning have little to do with the larger picture, the US economy is slipping back and likely will weaken through the rest of the year. If not weaken, the best we can see is stagnant economic growth. At 8:30 weekly jobless claims were down 6K to 428K, another less than expected report; claims were expected at 413K. Continuing claims at 3.71 mil frm 3.712 mil. Claims remain high, unemployment isn't declining.
At 8:30 revisions of Q1 productivity and unit labor costs; productivity at +1.8% frm +1.6% and unit labor costs +0.7% frm +1.0%. Old data that shouldn't have much impact on markets.
Today will be about tomorrow's May employment report, until yesterday's very weak ADP private jobs numbers (+38K with forecasts of +177K) the estimates for tomorrow's non-farm private jobs were in the range of 200K. After the ADP report consensus estimates were quickly revised to +120K levels. Always a crap shoot when anticipating jobs, this time is even more tedious. Traders and investors will adjust positions through the day to where they have comfort into employment; comfort is an oxymoron when it comes to the monthly employment however.
There shouldn't be much arguments now that the US economy is softening; all data over the past month has confirmed it and makes it more difficult to defend those optimistic forecasts that generally come from firms that benefit from better outlooks. There will be increasing debate now whether the Fed will do another QE move; the problem is the QE 2 $600B bond buying that ends at the end of this month didn't do anything to help the economy. While the bond-purchase program did push investors into higher-yielding assets such as stocks, the “transmission mechanism” to drive more money into the economy didn’t work. Another easing move from the Fed won't help either. There isn't much the Fed can do that it hasn't already tried and failed. It is all about the consumer and spending, consumers are not about to increase discretionary spending with high energy prices, declining home prices and uncertain employment outlooks. Amazing how the establishment doesn't understand it.
At 9:30 the DJIA opened +5, the 10 yr -14/32 2.99% +4 bp and mortgage prices -10/32 (.31 bp). Within a few minutes after the open the DJIA went negative, at 9:40 -11.
At 10:00 April factory orders, expected down 1.0%, were down 1.2%; April durable goods orders unchanged at -3.6%. No initial reaction.
Look for the day to be relatively quiet with interest rates slightly weaker and equity market indexes hanging around unchanged. Tomorrow's 8:30 May employment report should keep traders from being aggressive in either direction. Yesterday's strong rally in the bond and mortgage markets pushed the 10 yr RSI into overbought levels and betting heavily on the data tomorrow is a fool's errand.
Wednesday, June 1, 2011
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