Real Estate Agents you can count on!
http://ping.fm/iV0WJ
Saturday, December 3, 2011
Friday, December 2, 2011
Mortgage Rates
Today's news will feature the unemployment rte dropped to 8.6% frm 9.0%; non-farm jobs increased 120K while private non-farm jobs increased 140K, average hourly earnings +0.1%. The unemployment rate is the lowest since March 2009, but there is a hitch to the headline; the labor participation rate declined to 64.0% frm 64.2% implying that more potential workers have dropped out from looking for a job. The decrease in the jobless rate reflected a 278,000 gain in employment at the same time 315,000 Americans left the labor force. Revisions to Sept and Oct added 72K more jobs than originally reported. The U-6 underemployment rate declined from 16.2% to 15.6%, it includes part- time workers who’d prefer a full-time position and people who want work but have given up looking.
That non-farm jobs increased 120K reflects many jobs are temporary hirings for the holidays, the reaction in the bond and mortgage markets wasn't much change from yesterday's closes although slightly lower as traders discount the decline in the unemployment rate and job growth was fractionally lower than general estimates. The stock indexes were trading better prior to 8:30 on the back of continued improvement in Europe's equity markets; there was little change in the indexes following the report.
In Europe there is some increased optimism that the debt crisis may be helped by the ECB funneling funds to the IMF then the IMF leverages the funds and provides funds to Italy and Spain taking them back from the abyss. Next Friday Europe's leaders will meet in a summit in Brussels, the meeting must end with something more than what the world has had to swallow for two years----a lot of talk but little action. Given the improvement in Europe's equity markets this week and the best week for Italy's and Spain's 2 yr note yields this week, optimism is increasing.
So far today the employment report has had little impact on the US financial markets. The bellwether 10 yr note has near term support at 2.12% that has been tested a few times and held, at 10:00 it traded at 2.11% after ending yesterday at 2.10% after moving to 2.14% intraday yesterday. Mortgages have been held captive in a 50 basis point price range for three weeks now while the 10 yr volatility swings its yield from 2.12% to 1.86% on every sentence out of the mouths of Europe's leaders.
We haven't changed our outlook that the US interest rate markets are unlikely to decline much from the present levels and have more potential to rise that decline. While Europe's mess will take years to resolve the markets now are believing that a plan will surface soon that will remove much of concern that Europe's banks would fail. Over the last couple of weeks the safety moves into US treasuries has ebbed substantially. We can argue that the US economy won't improve much based on the housing market and the high level of unemployment, however trading in the equity markets implies investors are increasingly more optimistic about the future. Either way one sees it the reality is that no one is sure, that has lead to huge wings in the indexes and has contributed to keeping interest rates from falling further.
Today's news will feature the unemployment rte dropped to 8.6% frm 9.0%; non-farm jobs increased 120K while private non-farm jobs increased 140K, average hourly earnings +0.1%. The unemployment rate is the lowest since March 2009, but there is a hitch to the headline; the labor participation rate declined to 64.0% frm 64.2% implying that more potential workers have dropped out from looking for a job. The decrease in the jobless rate reflected a 278,000 gain in employment at the same time 315,000 Americans left the labor force. Revisions to Sept and Oct added 72K more jobs than originally reported. The U-6 underemployment rate declined from 16.2% to 15.6%, it includes part- time workers who’d prefer a full-time position and people who want work but have given up looking.
That non-farm jobs increased 120K reflects many jobs are temporary hirings for the holidays, the reaction in the bond and mortgage markets wasn't much change from yesterday's closes although slightly lower as traders discount the decline in the unemployment rate and job growth was fractionally lower than general estimates. The stock indexes were trading better prior to 8:30 on the back of continued improvement in Europe's equity markets; there was little change in the indexes following the report.
In Europe there is some increased optimism that the debt crisis may be helped by the ECB funneling funds to the IMF then the IMF leverages the funds and provides funds to Italy and Spain taking them back from the abyss. Next Friday Europe's leaders will meet in a summit in Brussels, the meeting must end with something more than what the world has had to swallow for two years----a lot of talk but little action. Given the improvement in Europe's equity markets this week and the best week for Italy's and Spain's 2 yr note yields this week, optimism is increasing.
So far today the employment report has had little impact on the US financial markets. The bellwether 10 yr note has near term support at 2.12% that has been tested a few times and held, at 10:00 it traded at 2.11% after ending yesterday at 2.10% after moving to 2.14% intraday yesterday. Mortgages have been held captive in a 50 basis point price range for three weeks now while the 10 yr volatility swings its yield from 2.12% to 1.86% on every sentence out of the mouths of Europe's leaders.
We haven't changed our outlook that the US interest rate markets are unlikely to decline much from the present levels and have more potential to rise that decline. While Europe's mess will take years to resolve the markets now are believing that a plan will surface soon that will remove much of concern that Europe's banks would fail. Over the last couple of weeks the safety moves into US treasuries has ebbed substantially. We can argue that the US economy won't improve much based on the housing market and the high level of unemployment, however trading in the equity markets implies investors are increasingly more optimistic about the future. Either way one sees it the reality is that no one is sure, that has lead to huge wings in the indexes and has contributed to keeping interest rates from falling further.
Thursday, December 1, 2011
Mortgage Rates
Treasuries and mortgages opened weaker this morning, at 8:30 weekly jobless claims that were expected to be down 2K jumped 6K to 402K and last week's claims were revised higher to 396K frm 393K. Back above what traders consider pivotal 400K. Prior to the claims report the 10 yr note traded at 2.13% up 5 bp frm yesterday's close and breaking its key short tem moving averages. Mortgages still holding well against the rise in treasury rates but still a little weaker at 9:00, down 6/32 (.18 bp) frm yesterday's close.
Markets still thinking about what was behind the unexpected coordinated central bank's move yesterday to increase liquidity in the currency markets. Some talk that a bank in Europe was on the edge of failing but who really knows these days. Whether there is any truth in it doesn't matter; banks in Europe are drowning in debt from Greece, Italy, Spain and a few other countries and are on the edge of failure.
Spain and France borrowing costs declined today after the lowered currency swap rate announcement yesterday. Is Europe getting closer to some kind of resolution of the debt mess that will save its banks? Hard to be sure, the debts are so huge that in the end it will take many years to resolve it. Next week leaders of the EU will meet (Dec 9), if they don't have a workable solution or plan that is credible markets are going to blow up, stocks will likely drop globally and safety to US treasuries will increase once more. That said, although we have no insight other than it has to end soon, markets seem to be expecting something positive next week. US treasury rates are increasing, the safety trade into US treasuries ran out of gas a few weeks ago, and the action by the central banks yesterday suggest Europe has to do something now; anymore delays will bring the house of cards down hard. Europe is at the end of the road of arguments and differences of opinion; after two years either Europe's banks will begin to fail or there will be some kind of plan to take it back from the edge----there is no time left for fiddling, time is up!
A lot of talk these days that the US economy is improving, most of it comes from those that have a vested interest in touting any bullish view. The economy is stagnant at best; like the three bears not too hot but not too cool either. Every data point recently is taken as the final word, and every negative data point these days is largely discounted. The reality is, with Europe teetering on a serious crisis there is actually no real strong consensus either way. The proof is obvious; huge swings in stock indexes but in the wider perspective no directional change. We are all in a state of mass uncertainty and until Europe can find any solution to their debt crisis nothing will change. Wrap a big red Christmas ribbon around it; with the housing market in depression and unemployment not likely to decline much, the outlook for the US is not good, not bad either.
Attempting to read the tea laves of the fundamentals these days is impossible with the issues that bear on the markets. Looking purely at the technicals though is somewhat clearer; the 10 yr treasury yield is increasing and breaking support levels, mortgage prices locked in a 50 basis point price range for the last three weeks. Technicals ignore all the talk and measure what is actually happening with each market; how much buying and selling---what money is doing, not what CNBC or Bloomberg guests have to say. Based on what money is doing today, money is leaving treasury markets and in turn have capped the decline in mortgage rates. As noted though, uncertainty over Europe keeps volatility and uncertainty at very high levels.
Treasuries and mortgages opened weaker this morning, at 8:30 weekly jobless claims that were expected to be down 2K jumped 6K to 402K and last week's claims were revised higher to 396K frm 393K. Back above what traders consider pivotal 400K. Prior to the claims report the 10 yr note traded at 2.13% up 5 bp frm yesterday's close and breaking its key short tem moving averages. Mortgages still holding well against the rise in treasury rates but still a little weaker at 9:00, down 6/32 (.18 bp) frm yesterday's close.
Markets still thinking about what was behind the unexpected coordinated central bank's move yesterday to increase liquidity in the currency markets. Some talk that a bank in Europe was on the edge of failing but who really knows these days. Whether there is any truth in it doesn't matter; banks in Europe are drowning in debt from Greece, Italy, Spain and a few other countries and are on the edge of failure.
Spain and France borrowing costs declined today after the lowered currency swap rate announcement yesterday. Is Europe getting closer to some kind of resolution of the debt mess that will save its banks? Hard to be sure, the debts are so huge that in the end it will take many years to resolve it. Next week leaders of the EU will meet (Dec 9), if they don't have a workable solution or plan that is credible markets are going to blow up, stocks will likely drop globally and safety to US treasuries will increase once more. That said, although we have no insight other than it has to end soon, markets seem to be expecting something positive next week. US treasury rates are increasing, the safety trade into US treasuries ran out of gas a few weeks ago, and the action by the central banks yesterday suggest Europe has to do something now; anymore delays will bring the house of cards down hard. Europe is at the end of the road of arguments and differences of opinion; after two years either Europe's banks will begin to fail or there will be some kind of plan to take it back from the edge----there is no time left for fiddling, time is up!
A lot of talk these days that the US economy is improving, most of it comes from those that have a vested interest in touting any bullish view. The economy is stagnant at best; like the three bears not too hot but not too cool either. Every data point recently is taken as the final word, and every negative data point these days is largely discounted. The reality is, with Europe teetering on a serious crisis there is actually no real strong consensus either way. The proof is obvious; huge swings in stock indexes but in the wider perspective no directional change. We are all in a state of mass uncertainty and until Europe can find any solution to their debt crisis nothing will change. Wrap a big red Christmas ribbon around it; with the housing market in depression and unemployment not likely to decline much, the outlook for the US is not good, not bad either.
Attempting to read the tea laves of the fundamentals these days is impossible with the issues that bear on the markets. Looking purely at the technicals though is somewhat clearer; the 10 yr treasury yield is increasing and breaking support levels, mortgage prices locked in a 50 basis point price range for the last three weeks. Technicals ignore all the talk and measure what is actually happening with each market; how much buying and selling---what money is doing, not what CNBC or Bloomberg guests have to say. Based on what money is doing today, money is leaving treasury markets and in turn have capped the decline in mortgage rates. As noted though, uncertainty over Europe keeps volatility and uncertainty at very high levels.
Subscribe to:
Posts (Atom)