Thursday's bond market has opened in positive territory following favorable economic data and early stock market losses. The major stock indexes are giving back yesterday's gains with the Dow currently down 160 points and the Nasdaq down 30 points. The bond market is currently up 12/32, which should improve this morning's mortgage rates by approximately .125 of a discount point over yesterday's morning rates.
January's Durable Goods Orders report was released early this morning, showing a surprising 3.0% increase in new orders for big-ticket items. This was much larger than the 1.4% increase that was expected, however, an upward revision of 0.9% to December's orders made the month-to-month change less drastic. Also, a reading within the report that tracks new orders for products not attributed to transportation related items actually fell 0.6% when it was expected to rise. This means that overall new orders rose more than expected, but when more volatile tr ansportation related orders are excluded, new orders fell short of forecasts. We can consider these results neutral or slightly favorable to bonds.
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Thursday, February 25, 2010
Sunday, February 14, 2010
Market UpDate
There are five economic reports worth watching this week that are likely to affect mortgage rates in addition to the minutes from the last FOMC meeting. The financial markets are closed tomorrow in observance of the President's Day Holiday and will reopen Tuesday morning. You may find some lenders to be open for business tomorrow, but I would not expect to see new rates issued until Tuesday.
Wednesday brings us three releases, including the week's least important of the five economic reports. January's Housing Starts will be posted early Wednesday morning, giving us an indication of housing sector strength and mortgage credit demand. It usually does not affect rates unless it varies greatly from forecasts. Current forecasts are calling for an increase in starts of new housing.
Wednesday brings us three releases, including the week's least important of the five economic reports. January's Housing Starts will be posted early Wednesday morning, giving us an indication of housing sector strength and mortgage credit demand. It usually does not affect rates unless it varies greatly from forecasts. Current forecasts are calling for an increase in starts of new housing.
Wednesday, February 10, 2010
Market UpDate
Wednesday's bond market has opened relatively flat as investors prepare for today's important 10-year Note auction. The stock markets are showing losses with the Dow down 72 points and the Nasdaq down 15 points. The bond market is currently up 2/32, but we will likely still see this morning's mortgage rates move higher by approximately .125 - .250 of a discount point due to weakness late yesterday.
Today's only semi-relevant economic data was December's Goods and Services Trade Balance. It revealed a $40.2 billion trade deficit that was much larger than expected. This data does not usually heavily influence mortgage rates, but can hurt or boost the U.S. dollar against other currencies that can make our securities more or less attractive to international investors. But today's data has not affected this morning's mortgage rates.
I suspect that today's 10-year Treasury Note auction will cause some afternoon revisions to mortgage rates today. I w ould be surprised if there was an overwhelmingly strong demand for the Notes, and as a result we could see afternoon weakness in bonds. This morning's flat open is not much concern as it is normal to see weakness ahead of the sales as participants prepare for them. But that any losses are usually recovered after if the sale goes well. Results will be posted at 1:00 PM ET, so any reaction would be during afternoon hours.
Today's only semi-relevant economic data was December's Goods and Services Trade Balance. It revealed a $40.2 billion trade deficit that was much larger than expected. This data does not usually heavily influence mortgage rates, but can hurt or boost the U.S. dollar against other currencies that can make our securities more or less attractive to international investors. But today's data has not affected this morning's mortgage rates.
I suspect that today's 10-year Treasury Note auction will cause some afternoon revisions to mortgage rates today. I w ould be surprised if there was an overwhelmingly strong demand for the Notes, and as a result we could see afternoon weakness in bonds. This morning's flat open is not much concern as it is normal to see weakness ahead of the sales as participants prepare for them. But that any losses are usually recovered after if the sale goes well. Results will be posted at 1:00 PM ET, so any reaction would be during afternoon hours.
Friday, February 5, 2010
Market UpDate
Friday's bond market has opened fairly flat following this morning's release of January's employment figures. The stock markets are also relatively flat considering the past couple of days with the Dow down 11 points and the Nasdaq up 6 points. The bond market is currently up 2/32, which will likely improve this morning's mortgage rates by approximately .125 of a discount point. However, that change comes more from yesterday's rally than today's news.
The Labor Department gave us today's major news. The monthly Employment report is arguably the most important report we see each month. Ironically, the market reaction has been little, especially when yesterday's usually irrelevant weekly unemployment report helped fuel a major stock sell-off and nice bond rally. It is supposed to be the other way around- monthly report causes significant volatility while the weekly report is a non-factor.
Today's release actually gave us mixed results. The headl ine number was the 9.7% unemployment rate that was well below the 10.0% that was expected. But offsetting that negative news for bonds was the loss of 20,000 jobs when new payrolls were expected to be up 15,000. Also favorable to bonds was a sizable downward revision to December's payroll numbers. It was previously announced last month that 85,000 jobs were lost during December, but today's release revised that loss to 150,000. This means that more jobs were lost during the past two months than many had thought.
The Labor Department gave us today's major news. The monthly Employment report is arguably the most important report we see each month. Ironically, the market reaction has been little, especially when yesterday's usually irrelevant weekly unemployment report helped fuel a major stock sell-off and nice bond rally. It is supposed to be the other way around- monthly report causes significant volatility while the weekly report is a non-factor.
Today's release actually gave us mixed results. The headl ine number was the 9.7% unemployment rate that was well below the 10.0% that was expected. But offsetting that negative news for bonds was the loss of 20,000 jobs when new payrolls were expected to be up 15,000. Also favorable to bonds was a sizable downward revision to December's payroll numbers. It was previously announced last month that 85,000 jobs were lost during December, but today's release revised that loss to 150,000. This means that more jobs were lost during the past two months than many had thought.
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