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, April 08, 2011
Treasuries and mortgages under pressure early this morning with stock indexes looking better for the open at 9:30. At 9:13 the 10 yr -12/32 at 3.59% working to test 3.60%, mortgage prices at 9:15 -7/32 (.22 bp). At 9:30 the DJIA opened +35, 10 yr -12/32 3.59% and mortgage prices -.22 bp.
Crude oil continues to increase on unwavering concerns that oil supplies may be in some kind of jeopardy of decline although so far that hasn't been the case as oil now setting another record. Gold higher also this morning as most (except the Federal Reserve) are increasingly concerned that inflation will edge higher. The Fed of course lead by Bernanke doesn't believe inflation is now, or will be in the future, a problem. Within the Fed there are about as many opinions about ending QE or increasing the FF rate as there are officials which seem to multiply daily. Markets however are not as optimistic on the inflation outlook; inflation is increasing everywhere in the world except the US and it isn't logical that US markets will accept Bernanke's outlook.
The only thing today is the budget battle in Washington where the political misfits continue to argue over five-one thousandths of 1.0% of the total budget. Republicans, Democrats, the White House and tea party people cannot agree to make a $5B additional cut to keep the government from shutting down. Likely it will get done before a shutdown becomes necessary but we shiver at the prospect of our elected officials being able to deal with the budget in 2012 that will (or should) include increases in revenues and cuts in entitlement programs. As always is the case all of them will be more concerned with being re-elected than doing the peoples business.
At 10:00 the only data point, Feb wholesale inventories were expected up 1.0%, as reported up 1.0%; sales were however down 0.8% on expectations of being up 1.8%, the inventory to sales ratio at 1.16 month from 1.14 months in Jan. . This week there hasn't been much in the way of economic measurements; inventories don't get much attention from traders.
This morning the 10 yr note is testing 3.60%, the level that should hold the note at least for the day. If it gives way the next run will take it to 3.75% and push up mortgage rates another 15 basis points in rate. The rest of the day for the bond and mortgage markets will be watching the trade in equities; the DJIA opened +35 but within 10 minutes it slipped back to +17. All of our models and technical indicators are giving off bearish readings now.
Friday, April 8, 2011
Thursday, April 7, 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, April 07, 2011
Treasuries and mortgages started a little weaker this morning; at 8:00 the 10 yr -5/32 and mortgages -2/32 (.06 bp). By 9:00 the 10 moved back to unchanged and mortgages +1/32 (.03 bp) frm yesterday's close. US stock indexes in pre-market trading were unchanged at 9:00. At 9:30 the DJIA opened -9, 10 yr note +1/32 3.55% unch, mortgage prices
+2/32 on 30s, +3/32 on 15s.
Weekly jobless claims at 8:30 were down 10K to 382K after another slight upward revision last week from 388K to 392K, the second week in a row claims have been revised a little higher from original reports. Continuing claims edged lower, to 3.72 mil from 3.73 mil last week.
A lot of media focus on the budget talks in Washington and to keep everyone on edge hyping the possibility of a government shutdown that is very unlikely. The Pres and Congressional leaders are close to an agreement to avoid even a few days of closings. This budget debate only deals with the budget through the end of this fiscal year (Sept); it is a prelim to the big debate (fight) over the 2012 budget. Politicians talk the talk about getting the budget deficit under control but for many years have not had the guts to walk the walk. Even some economists are out there saying the budget isn't a priority, zombies walking in a death gaze.
March chain store sales were better than expected. Not much, but better overall. Markets expected it and the various reports have done little to motivate investors.
Later this morning Treasury will announce the details for next week's auctions; 3 yr and 10 yr notes and 30 yr bond should total $66B down from $72B on last months same auctions.
The European Central Bank did what was widely expected and telegraphed by Jean Claude Trichet the head man at the ECB; it increased its base rate to 1.25% from 1.00%, the first rate increase in three years. Trichet said the increase was not the beginning of a series of increases, but most economists believe it is and that the rate will be at 1.75% by the end of the year. German economic growth and increasing signs of inflation in Europe is setting up more rate hikes justifying that rationale. Today’s ECB rate increase is the first since July 2008 and also the first time in 40 years that Europe’s benchmark has risen before the U.S. equivalent. Our Fed is reluctant to move rates on the belief that inflation isn't a problem and that the economy is still weaker than what the Fed wants to see.
The Bank of England also met today but left its base rate unchanged their policy makers judged the need to aid the recovery took precedence over the fastest inflation in more than two years. England's rate is 0.5% and has been at that level for 26 months. UK service sector saw improvement last month as announced Tuesday but manufacturing stalled in Feb. The UK struggling with inflation increase while consumer spending is being pressured by higher prices. The British Chamber of Commerce this week said first- quarter growth was probably between 0.6% and 0.7%. It said this is weaker than expected and adds to the argument that the Bank of England should delay raising its key interest rate.
Yesterday the 10 yr note broke its near term minor support at 3.50% to close at 3.55%. The 10 is now trading above its 20 and 40 day MAs on the yield chart. Mortgage markets also seeing breaks on its charts, slightly below the 20 and 40 day MAs on the price charts.
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, April 07, 2011
Treasuries and mortgages started a little weaker this morning; at 8:00 the 10 yr -5/32 and mortgages -2/32 (.06 bp). By 9:00 the 10 moved back to unchanged and mortgages +1/32 (.03 bp) frm yesterday's close. US stock indexes in pre-market trading were unchanged at 9:00. At 9:30 the DJIA opened -9, 10 yr note +1/32 3.55% unch, mortgage prices
+2/32 on 30s, +3/32 on 15s.
Weekly jobless claims at 8:30 were down 10K to 382K after another slight upward revision last week from 388K to 392K, the second week in a row claims have been revised a little higher from original reports. Continuing claims edged lower, to 3.72 mil from 3.73 mil last week.
A lot of media focus on the budget talks in Washington and to keep everyone on edge hyping the possibility of a government shutdown that is very unlikely. The Pres and Congressional leaders are close to an agreement to avoid even a few days of closings. This budget debate only deals with the budget through the end of this fiscal year (Sept); it is a prelim to the big debate (fight) over the 2012 budget. Politicians talk the talk about getting the budget deficit under control but for many years have not had the guts to walk the walk. Even some economists are out there saying the budget isn't a priority, zombies walking in a death gaze.
March chain store sales were better than expected. Not much, but better overall. Markets expected it and the various reports have done little to motivate investors.
Later this morning Treasury will announce the details for next week's auctions; 3 yr and 10 yr notes and 30 yr bond should total $66B down from $72B on last months same auctions.
The European Central Bank did what was widely expected and telegraphed by Jean Claude Trichet the head man at the ECB; it increased its base rate to 1.25% from 1.00%, the first rate increase in three years. Trichet said the increase was not the beginning of a series of increases, but most economists believe it is and that the rate will be at 1.75% by the end of the year. German economic growth and increasing signs of inflation in Europe is setting up more rate hikes justifying that rationale. Today’s ECB rate increase is the first since July 2008 and also the first time in 40 years that Europe’s benchmark has risen before the U.S. equivalent. Our Fed is reluctant to move rates on the belief that inflation isn't a problem and that the economy is still weaker than what the Fed wants to see.
The Bank of England also met today but left its base rate unchanged their policy makers judged the need to aid the recovery took precedence over the fastest inflation in more than two years. England's rate is 0.5% and has been at that level for 26 months. UK service sector saw improvement last month as announced Tuesday but manufacturing stalled in Feb. The UK struggling with inflation increase while consumer spending is being pressured by higher prices. The British Chamber of Commerce this week said first- quarter growth was probably between 0.6% and 0.7%. It said this is weaker than expected and adds to the argument that the Bank of England should delay raising its key interest rate.
Yesterday the 10 yr note broke its near term minor support at 3.50% to close at 3.55%. The 10 is now trading above its 20 and 40 day MAs on the yield chart. Mortgage markets also seeing breaks on its charts, slightly below the 20 and 40 day MAs on the price charts.
Wednesday, April 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.
Wednesday, April 06, 2011
The equity markets opened stronger this morning resulting in some minor price declines in treasuries and mortgages. Crude oil high as is gold and silver, precious metals continue to increase on inflation fears and continued concerns about major currencies. Demand for precious metals strengthened over the past week as investors sought a shelter to protect their wealth against the conflict in Libya, the nuclear crisis in Japan and European sovereign debt concerns.
No economic releases today; the DJIA opened +39 at 9:30 keeping a little pressure on the bond and mortgage markets. The 10 yr now at 3.51% right at its near term support; for the past eight days the 10 yr has moved on a tight 10 bp range (3.40% to 3.50%). The wider and more important support for the note comes at 3.60%.
More mixed thoughts from another Fed official on ending QE and increasing the FF rate. Atlanta Fed Pres Lockhart said he doesn’t expect the central bank to tighten U.S. monetary policy by the end of the year with inflation low and the economic recovery fragile. “I wouldn’t rule it out entirely, but at this stage I personally am not leaning in the direction of thinking that is absolutely required.”
Mortgage applications decreased 2.0% from one week earlier, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending April 1, 2011. The Refinance Index decreased 6.2% to its lowest level since February 25, 2011. The Government Purchase Index increased 10.3% to its highest level since May 7, 2010. The unadjusted Purchase Index increased 7.0% compared with the previous week and was 16.8% lower than the same week one year ago. The four week moving average for the seasonally adjusted Market Index is down 1.9%. The four week moving average is up 0.9% for the seasonally adjusted Purchase Index, while this average is down 3.2% for the Refinance Index. The refinance share of mortgage activity decreased to 61.2 percent of total applications from 64.3 percent the previous week. This is the lowest refinance share since May 7, 2010. The adjustable-rate mortgage (ARM) share of activity increased to 6.1% from 5.7% of total applications from the previous week. The average contract interest rate for 30-year fixed-rate mortgages increased to 4.93% from 4.92%, with points decreasing to 0.70 from 0.83 (including the origination fee) for 80% loans. The average contract interest rate for 15-year fixed-rate mortgages decreased to 4.14% from 4.16%, with points increasing to 1.09 from 0.99 (including the origination fee) for 80% loans.
The rest of the session today will be watching stock indexes; as long as they are improved the bond market doesn't have much reason to improve. Mortgage prices likely to stay weak also.
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, April 06, 2011
The equity markets opened stronger this morning resulting in some minor price declines in treasuries and mortgages. Crude oil high as is gold and silver, precious metals continue to increase on inflation fears and continued concerns about major currencies. Demand for precious metals strengthened over the past week as investors sought a shelter to protect their wealth against the conflict in Libya, the nuclear crisis in Japan and European sovereign debt concerns.
No economic releases today; the DJIA opened +39 at 9:30 keeping a little pressure on the bond and mortgage markets. The 10 yr now at 3.51% right at its near term support; for the past eight days the 10 yr has moved on a tight 10 bp range (3.40% to 3.50%). The wider and more important support for the note comes at 3.60%.
More mixed thoughts from another Fed official on ending QE and increasing the FF rate. Atlanta Fed Pres Lockhart said he doesn’t expect the central bank to tighten U.S. monetary policy by the end of the year with inflation low and the economic recovery fragile. “I wouldn’t rule it out entirely, but at this stage I personally am not leaning in the direction of thinking that is absolutely required.”
Mortgage applications decreased 2.0% from one week earlier, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending April 1, 2011. The Refinance Index decreased 6.2% to its lowest level since February 25, 2011. The Government Purchase Index increased 10.3% to its highest level since May 7, 2010. The unadjusted Purchase Index increased 7.0% compared with the previous week and was 16.8% lower than the same week one year ago. The four week moving average for the seasonally adjusted Market Index is down 1.9%. The four week moving average is up 0.9% for the seasonally adjusted Purchase Index, while this average is down 3.2% for the Refinance Index. The refinance share of mortgage activity decreased to 61.2 percent of total applications from 64.3 percent the previous week. This is the lowest refinance share since May 7, 2010. The adjustable-rate mortgage (ARM) share of activity increased to 6.1% from 5.7% of total applications from the previous week. The average contract interest rate for 30-year fixed-rate mortgages increased to 4.93% from 4.92%, with points decreasing to 0.70 from 0.83 (including the origination fee) for 80% loans. The average contract interest rate for 15-year fixed-rate mortgages decreased to 4.14% from 4.16%, with points increasing to 1.09 from 0.99 (including the origination fee) for 80% loans.
The rest of the session today will be watching stock indexes; as long as they are improved the bond market doesn't have much reason to improve. Mortgage prices likely to stay weak also.
Tuesday, April 5, 2011
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