Mortgage Rate Update
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Friday, March 11, 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.
Friday, March 11, 2011
The overriding news this morning is the earthquake that hit Japan that set off a huge Tsunami, moving to Hawaii and by 10:00 this morning due to hit the west coast of the US. The earthquake at 8.9 is the strongest to hit Japan in over 100 years. Our prayers for the people of Japan where the death toll at 9:00 is at 300 and climbing.
Treasuries and mortgages started lower in price this morning, down 10/32 on the 10 and -6/32 on MBSs; by 9:00 the 10 had moved back to unchanged and mortgage prices off 2/32 (.06 bp) frm yesterday's strong close. At 9:30 the DJIA opened -35, the 10 yr note and mortgages unchanged from yesterday's closes. By 9:45 the DJIA was trading a little better with the 10 yr -5/32 and mortgage prices -4/32 (.12 bp).
At 8:30 Feb retail sales increased 1.0% as expected, ex auto sales up 0.7% also as forecast; ex gasoline sales sales were up 0.9%. The increase is the most in four months, spurred by job gains and more seasonable temperatures. The 1.0% increase in sales followed a revised 0.7% rise in January that was more than double the previous estimate. Sales climbed 2.3% at automobile dealers, consistent with industry figures that showed car purchases climbed last month to a 13.38 million unit annual pace that was the best since the government’s cash-for-clunkers program in August 2009. The reaction to the strong sales report was not as expected, the DJIA index fell more and at 9:15 traded down 60 points. US retail sales have been pushed off the table as stock markets in Europe and here are being impacted by the quake in Japan with insurance companies being hit hard.
Oil prices are tumbling this morning, crude fell under $100.00 before bouncing back a little and then retreating again at 9:30. While Saudi Arabia is preparing for the "Day of Rage" protest by Shiite Muslim minorities, there is little concern among oil traders that it will amount to much. The impact on oil markets is coming from Japan and the view that the damages will cause a decline in use for oil. Still a touchy market as always. That Japan will need less oil based on usage is questionable in our view but now traders are taking money off the table pushing the price lower.
At 9:55 the U. of Michigan mid-month consumer sentiment index, expected at 76.5 frm 77.5 at the end of Feb; the sentiment index hit at 68.2 the lowest since last Oct. The current conditions index at 83.6 frm 86.9; expectations index at 58.3 frm 71.6 and the 12 month economic outlook at 64 frm 85. Overall a very negative report but it didn't generate much selling in equity markets and actually caused the rate markets to fall a little in prices. The reason for the selling in the bond market was due to the inflation outlook in the report, it increased; inflation fears continue to rest under every data point.
At 10:00 Jan business inventories, expected up 0.8%, were up 0.9%, Dec was revised to +1.1% from 0.8%. Sales were up 2.0% with the inventory to sales ratio was 1.23 months. Not a market mover.
The bond and mortgage markets rallied nicely yesterday turning many of out technical indicators from neutral to slightly bullish, in order to confirm a move lower in rates near term we want to see more gains today which would confirm our initial technical observations.
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.
Friday, March 11, 2011
The overriding news this morning is the earthquake that hit Japan that set off a huge Tsunami, moving to Hawaii and by 10:00 this morning due to hit the west coast of the US. The earthquake at 8.9 is the strongest to hit Japan in over 100 years. Our prayers for the people of Japan where the death toll at 9:00 is at 300 and climbing.
Treasuries and mortgages started lower in price this morning, down 10/32 on the 10 and -6/32 on MBSs; by 9:00 the 10 had moved back to unchanged and mortgage prices off 2/32 (.06 bp) frm yesterday's strong close. At 9:30 the DJIA opened -35, the 10 yr note and mortgages unchanged from yesterday's closes. By 9:45 the DJIA was trading a little better with the 10 yr -5/32 and mortgage prices -4/32 (.12 bp).
At 8:30 Feb retail sales increased 1.0% as expected, ex auto sales up 0.7% also as forecast; ex gasoline sales sales were up 0.9%. The increase is the most in four months, spurred by job gains and more seasonable temperatures. The 1.0% increase in sales followed a revised 0.7% rise in January that was more than double the previous estimate. Sales climbed 2.3% at automobile dealers, consistent with industry figures that showed car purchases climbed last month to a 13.38 million unit annual pace that was the best since the government’s cash-for-clunkers program in August 2009. The reaction to the strong sales report was not as expected, the DJIA index fell more and at 9:15 traded down 60 points. US retail sales have been pushed off the table as stock markets in Europe and here are being impacted by the quake in Japan with insurance companies being hit hard.
Oil prices are tumbling this morning, crude fell under $100.00 before bouncing back a little and then retreating again at 9:30. While Saudi Arabia is preparing for the "Day of Rage" protest by Shiite Muslim minorities, there is little concern among oil traders that it will amount to much. The impact on oil markets is coming from Japan and the view that the damages will cause a decline in use for oil. Still a touchy market as always. That Japan will need less oil based on usage is questionable in our view but now traders are taking money off the table pushing the price lower.
At 9:55 the U. of Michigan mid-month consumer sentiment index, expected at 76.5 frm 77.5 at the end of Feb; the sentiment index hit at 68.2 the lowest since last Oct. The current conditions index at 83.6 frm 86.9; expectations index at 58.3 frm 71.6 and the 12 month economic outlook at 64 frm 85. Overall a very negative report but it didn't generate much selling in equity markets and actually caused the rate markets to fall a little in prices. The reason for the selling in the bond market was due to the inflation outlook in the report, it increased; inflation fears continue to rest under every data point.
At 10:00 Jan business inventories, expected up 0.8%, were up 0.9%, Dec was revised to +1.1% from 0.8%. Sales were up 2.0% with the inventory to sales ratio was 1.23 months. Not a market mover.
The bond and mortgage markets rallied nicely yesterday turning many of out technical indicators from neutral to slightly bullish, in order to confirm a move lower in rates near term we want to see more gains today which would confirm our initial technical observations.
Thursday, March 10, 2011
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, March 10, 2011
Treasuries and mortgage markets doing better this morning after a nice rally yesterday. At 8:30 weekly unemployment filings were generally expected to be up 7K, we were looking for 14K; as released claims increased 26K back to 397K. Continuing claims were lower at 3.771 mil frm 3.791 mil last week, the lowest continuing claims since Oct 2008. The 4 wk average smoothing the week by week volatility increased 8K to 392,250.
Also at 8:30 the Jan international trade deficit expected at $41.5B was higher at $46.34B. Imports jumped 5.2%, the most since March 1993, while exports grew 2.7%. Exports increased to $167.7B, boosted by record shipments of industrial supplies and more deliveries of motor vehicles and food. Imports climbed to $214.1B from $203.6B in the prior month. Purchases of capital goods rose to a record $41.7B in January, while auto imports were the highest since February 2008. The January trade figures showed the U.S. imported 290.7 million barrels of crude oil, the most since August. The value of oil imports increased to $24.5 billion from $22.5 billion. The average price per barrel of imported crude reached $84.34, the highest since October 2008.
Weekly claims up more than expected put a very slight bid in the bond market; the 10 yr note at 9:15 up 3/32 while mortgage prices were trading up 4/32 (.12 bp) frm yesterday's strong close. The stock indexes were weak and at 9:30 the DJIA and the other two key indexes opened soft. Crude oil trading lower this morning as is gold.
More unrest in Egypt yesterday, Christians fighting Muslims over a Christian man in love with a Muslim woman; 13 people were killed in the fight. In Libya Qaddafi forces re-took a city held by the opposition. None of it has impacted oil prices with crude trading down $1.10 at 9:30.
The Bank of England left its base rate unchanged in their meeting. The British pound took a hit. The Brits are facing increasing inflation, and even with the ECB moving close to increasing rates the BofE chose to leave rates unchanged sending the London stock market lower along with all of Europe's stock markets.
The DJIA opened down 160 points at 9:30 and sent US bond and mortgage prices higher. The 10 yr note is almost at its past resistance level, trading at 3.43% at 9:30; 3.40% has halted all attempts to move lower.
At 1:00 Treasury will complete its borrowing for the week with $13B of 30 yr bonds in a re-open of the 30 yr bond issued last month. Yesterday's 10 yr auction was very strong with bidding at 3 basis points lower than where the 10 was actually trading prior to the auction. Today's 30 yr will also likely see strong demand, the amount is rather small.
At 2:00 Treasury will report that the Feb budget deficit for the month totaled an additional $196B; meanwhile in Washington Congress and the Administration haven't done squat in their debates over spending cuts. Maybe Congress is listening to Michael Moore who is running around espousing the US isn't broke and we have all the money we need. Apparently Mr. Moore fails to understand spending more money that you have implies the US doesn't have the money and has to borrow it; our deficit is now over $7 trillion.
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, March 10, 2011
Treasuries and mortgage markets doing better this morning after a nice rally yesterday. At 8:30 weekly unemployment filings were generally expected to be up 7K, we were looking for 14K; as released claims increased 26K back to 397K. Continuing claims were lower at 3.771 mil frm 3.791 mil last week, the lowest continuing claims since Oct 2008. The 4 wk average smoothing the week by week volatility increased 8K to 392,250.
Also at 8:30 the Jan international trade deficit expected at $41.5B was higher at $46.34B. Imports jumped 5.2%, the most since March 1993, while exports grew 2.7%. Exports increased to $167.7B, boosted by record shipments of industrial supplies and more deliveries of motor vehicles and food. Imports climbed to $214.1B from $203.6B in the prior month. Purchases of capital goods rose to a record $41.7B in January, while auto imports were the highest since February 2008. The January trade figures showed the U.S. imported 290.7 million barrels of crude oil, the most since August. The value of oil imports increased to $24.5 billion from $22.5 billion. The average price per barrel of imported crude reached $84.34, the highest since October 2008.
Weekly claims up more than expected put a very slight bid in the bond market; the 10 yr note at 9:15 up 3/32 while mortgage prices were trading up 4/32 (.12 bp) frm yesterday's strong close. The stock indexes were weak and at 9:30 the DJIA and the other two key indexes opened soft. Crude oil trading lower this morning as is gold.
More unrest in Egypt yesterday, Christians fighting Muslims over a Christian man in love with a Muslim woman; 13 people were killed in the fight. In Libya Qaddafi forces re-took a city held by the opposition. None of it has impacted oil prices with crude trading down $1.10 at 9:30.
The Bank of England left its base rate unchanged in their meeting. The British pound took a hit. The Brits are facing increasing inflation, and even with the ECB moving close to increasing rates the BofE chose to leave rates unchanged sending the London stock market lower along with all of Europe's stock markets.
The DJIA opened down 160 points at 9:30 and sent US bond and mortgage prices higher. The 10 yr note is almost at its past resistance level, trading at 3.43% at 9:30; 3.40% has halted all attempts to move lower.
At 1:00 Treasury will complete its borrowing for the week with $13B of 30 yr bonds in a re-open of the 30 yr bond issued last month. Yesterday's 10 yr auction was very strong with bidding at 3 basis points lower than where the 10 was actually trading prior to the auction. Today's 30 yr will also likely see strong demand, the amount is rather small.
At 2:00 Treasury will report that the Feb budget deficit for the month totaled an additional $196B; meanwhile in Washington Congress and the Administration haven't done squat in their debates over spending cuts. Maybe Congress is listening to Michael Moore who is running around espousing the US isn't broke and we have all the money we need. Apparently Mr. Moore fails to understand spending more money that you have implies the US doesn't have the money and has to borrow it; our deficit is now over $7 trillion.
Wednesday, March 9, 2011
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