Alliance Capital Group - Mortgage NEWS

Mortgage rates held steady today

2011-02-23T10:06:00.000-08:00

as the markets retained gains from yesterday. Oil prices are still being pressured with the events in Libya. Continued worldwide economic turmoil is good for the bond market as traders seek the safety of U.S. debt. High oil prices add to worldwide inflation and threaten not only U.S. but worldwide recovery. Meanwhile refi applications are up as folks take advantage of a drop in rates....

Mortgage rates held steady

2011-02-16T10:39:00.001-08:00

as mortgage bond prices fell off in early trading, but have since shown some recovery. Profit taking and a stronger housing outlook seem to be the culprit as the economic news seems to be on the positive side today. Wholesale inventories are up, along with the PPI. All are inflationary signs which are bad for bonds. This does not affect the fed's closely watched "core" inflation rate, but it does affect us consumers on our trips to the grocery store. Fed minutes to follow. Stay tuned.

Mortgage rates improved again today

2011-02-14T11:16:00.001-08:00

Mortgages are following the 10 year into positive territory for the second straight trading day. Members of the Fed remain optimistic, and on the defensive about the results of "QE2", while the administration rolls out a proposed deficit expansion with the new budget. Congress will likely spend much time debating where to draw red lines in this proposed budget to address short term deficit reduction in an effort to slow down the record debt servicing levels that the country is heading towards. Demonstrations continue in Egypt, although much of the "tension" has subsided.

Mortgage rates are slightly improved

2011-02-07T14:26:00.001-08:00

based on Friday afternoon's improvement. The market is showing some weakness today, as stocks rally behind commodity prices improving investors' economic outlook. Egypt remains in a state of turmoil, while Russia tightens regulations on banks capital ratio requirements.

Mortgage rates are slightly worse today

2011-02-02T15:47:00.001-08:00

Mortgage bond prices opened initially higher today, but are following treasuries into negative territory. The US funded regime in Egypt continues to falter with demonstration sizes increasing. Internet access has been restored, but the situation has not improved. Bill Gross speaks his mind about the current state of the US economy. As the director of the worlds biggest, and most successful bond fund, people tend to listen when he speaks. The jobs outlook in America is looking up, a positive sign for the US economy, this is bad for bonds and likely the reason that this mornings strength has reversed. Nothing left on tap for data today, so we'll have to continue to watch the headlines roll through to see where the market takes us. Punxsutawney Phil says "Winter's Over!" tell that to the people stuck at East Coast airports.

Mortgage rates improved today

2011-01-31T09:51:00.001-08:00

following Friday afternoon's gains. Mortgages are not getting their typical boost from social political turmoil today, however. Civil unrest in Egypt continues to dominate US headlines, while their stock market remains closed for the second straight business day, and is rumored to be closed for a third tomorrow. On the home front, the US consumer is showing continued strength due to increased personal spending, and a stable "core" inflation outlook despite rising commodity costs. Exports are also growing, with capital goods orders coming out of emerging markets, the US economy continues its fragile recovery.

Mortgage rates worsened today

2011-01-24T09:22:00.000-08:00

as mortgage bonds fail to hold onto Friday’s afternoon gains, widening to Treasuries as money managers pick up selling. It’s been awhile since Treasuries were positive (albeit slightly) and mortgages were in negative territory. All eyes seem to be focused on the FOMC rate decision on Wednesday but it’s likely to be a non-event. Treasuries may suffer this week as another round of auctions will overwhelm the continued QE2 buybacks and if so, mortgages will likely follow. Reports of a comprehensive EU support package are helping to calm sovereign fears and stocks are back in rally mode with the Dow up over 80-points. No data is scheduled for today.

Mortgage rates relatively unchanged today

2011-01-17T09:44:00.000-08:00

With all domestic markets closed, mortgage bond prices are neutral. There is no economic data scheduled for release today either, though there is news that could have potential to move markets. Apple shares have dropped feverishly on the German market as news of Steve Jobs' decision to reduce his role at Apple due to health concerns spreads. Airbus has maintained it's slim lead over rival Boeing for annual airplane orders. The European airplane manufacturer logged 200 last minute plane orders from low end, emerging market carriers that are choosing cost over quality. Keep in mind that there will be no recission or funding for today. All county offices are closed in observance of Dr. Martin Luther King Jr. Day.

Mortgage rates improved today

2011-01-13T08:57:00.000-08:00

as yesterday’s late afternoon gains have been sustained this morning. Initially bonds were more improved after weak jobless claims data was released but once traders got into the details of the report showing it was due to an administrative backlog from the holidays, bonds lost some ground. Strong trade balance data is also pressuring bonds. Currently we’re still above Wednesday’s closing marks—but barely. The Dow is down a mere 13-points at the moment. Today brings the final leg of Treasury auctions with the 30-year long bond on the block. Results due out around 10am.

Mortgage rates worsened today

2011-01-12T10:58:00.001-08:00

as mortgage bonds continue their losses from Tuesday, following Treasuries deeper into negative territory ahead of today’s 10-year auction. News of Japan’s offer to buy Euro bonds yesterday was not bond friendly, helping to stem the flight to quality. Trading conditions remain light and origination is a mere blip on the screens of bond traders. Stocks are back on a run as all indices are making gains, the Dow up almost 100-points in part due to speculation European officials are stepping up efforts to solve the debt crisis and U.S. banks will boost dividends.. In news released today, mortgage applications were up last week and Import prices were up largely thanks to higher fuel costs (notice the prices at the pump lately?). Later today the Fed Beige Book of economic activity will be released. Yesterday’s 3-year auction was average but bonds still sold off. Today’s 10-year results due out around 10am.

Mortgage rates near unchanged to slightly worse

2011-01-11T09:45:00.000-08:00

as mortgage bonds fail to hold onto later afternoon gains from Monday. Bonds are under pressure as traders set up for today’s buyback and auction--also seeing some money manager selling. Adding more pressure is Fed President Plosser’s comments reiterating his doubts on QE2 asset purchases. In news released today, small business optimism fell, job openings fell and wholesale inventories fell. These reports had little effect on the markets as the stock indices are all in positive territory halting 3 days of losses. Today’s 3-year Treasury auction results will be out around 10am.

Mortgage rates improved today

2011-01-07T10:28:00.000-08:00

as bonds get a lift from a disappointing jobs report. Employers added 103k compared with a median forecast of 150k for December—a forecast that was revised higher due to a extremely strong ADP report earlier this week. Stock market indices are in negative territory and the 10-year yield is down around 3.347% at the moment as Bernanke gives testimony before the U.S. Senate offering little new for the markets. He did recognize some recent data is positive but overall presented a more stale speech than the market was anticipating. Meanwhile, mortgages have tightened to Treasuries and regained all of Wednesday’s losses. We can hope this pattern will hold. Have a nice weekend.

Mortgage rates are higher today

2011-01-05T09:42:00.000-08:00

as mortgage bonds reverse most of the gains seen earlier this week. Feelings that the economy is on its way to a recovery are dominating trade today causing the 10yr note yield to rise to just over 3.4%, indicating lower demand for US debt. The Dow and the dollar are both showing strength, causing commodity prices to fall along with mortgage bonds and treasuries. There is no more economic data to be released today, so hopefully the board is set. But if stocks rally we could see continued weakness in the fixed income markets.

Mortgage rates improved today

2011-01-04T10:17:00.000-08:00

Mortgage bonds are shrugging off some generally positive economic news, and have shown steady improvement since late December. Post holiday retail sales have improved over last year which is helping the economy to look less hobbled along with stronger factory orders in November. The 10 year yield is hovering right around the 3.32 mark in light trading following the recent issuance of corporate debt. Fed minutes, ABC confidence and auto sales are on tap for later in the day. These numbers may have an impact on rates, depending on how they come in.

Mortgage rates improved today

2011-01-03T10:00:00.000-08:00

as mortgage bonds, despite being in negative territory, are better overall from Thursday’s levels when pricing was set. The market is still thinly traded as Asia is still on holiday. Bonds are under pressure as strong manufacturing and construction data was released today, continuing to paint a picture of a recovering economy. The stock markets are continuing to rally with the Dow up over 125-points at the moment.

Mortgage rates worsened today

2010-12-30T09:05:00.001-08:00

as mortgage bonds fail to sustain yesterday’s gains and Treasuries lose ground after more positive economic data was released today. Jobless claims decreased, business activity increased and pending home sales rose. Origination is light and trading conditions remain thin and choppy as 2010 come to a close. Stock markets are negative this morning but that can hardly take away the massive gains made this year. Let’s hope a bid reemerges for bonds in 2011 to help get the housing market back on its feet. Have a safe and festive New Year’s Eve!

Mortgage rates are slightly worse

2010-12-29T09:01:00.001-08:00

from yesterday’s multiple re-prices for the worse. Mortgage bonds and Treasuries are paring some losses at the moment but investors are pricing defensively ahead of today’s 7-year auction given yesterday’s carnage after a poor showing of Treasuries’ 5-year offering. No scheduled news was released today but tomorrow brings jobless claims and pending home sales before pricing is set. Trading conditions remain thin and choppy in this shortened final week of 2010. Auction results due out around 10am…

Mortgage rates near unchanged

2010-12-23T09:40:00.000-08:00

as mortgage bonds fail to hold onto Wednesday’s late afternoon gains this morning as a string of positive economic data was released. Durable goods orders increased, consumer spending increased, jobless claims decreased, and consumer sentiment rose. All this is painting a picture of a slowly improving economy. The only negative news story was builders sold fewer homes than expected. The thinly traded markets are not responding with any large movements—the Dow is up a mere 13 points and bonds are slightly negative. The Fed announced the auction amounts for next week as expected: $35B in 2-year on Monday, $35B in 5-year on Tuesday and $29B of 7-year on Wednesday. Not surprising traders are setting up for it and we see Treasuries down with the 10-year up around 3.379%. We’re not getting a Christmas rate rally, but hopefully you everything else you wanted…

Mortgage rates near unchanged

2010-12-22T10:24:00.001-08:00

as mortgage bonds fail to hold onto yesterday afternoon’s gains this morning. Despite GDP and home sales data coming in less than expected the market is still reading it as a sign of an improving economy. Mortgage applications fell off a cliff last week due to higher rates and government modification data was less than stellar with a 50% re-default rate. Treasuries are losing ground as the 10-year yield pushes up to 3.352% at the moment. The market is still very thin and choppy and tomorrow is a data packed day of durable goods, personal income and spending, inflation, jobless claims, consumer confidence and new home sales.

Mortgage rates are level to worse

2010-12-21T09:26:00.001-08:00

from yesterday’s re-price for the worse as mortgage bonds fail to hold onto Monday’s closing levels, taking their cue from Treasuries which are trending negative with the 10-year yield moving up to 3.75%. Stock market indices are all positive, continuing to rally into the year end but all markets are very thin as is the case this time of year with fewer participants--the stock markets appear over bought and the bond markets appear over sold—so it’s difficult to draw too much significance from current price action. ABC consumer confidence is the only scheduled data point today and will be released later this afternoon. Tomorrow and Thursday squeeze all the weeks’ news into two days so it could be a bumpy ride to close out this shortened holiday week. Stay tuned…

Mortgage rates improved again today

2010-12-20T09:05:00.001-08:00

as mortgage bonds continue to rally from Thursday and Friday as the same thin trading conditions that took us negative are now paring some losses. The 5-year Treasury buybacks are helping as no auctions are scheduled this week and very light origination is giving mortgages a bid despite underperforming versus Treasuries. The 10-year yield is now back down to 3.27% and the stock markets are decidedly negative as some disappointing corporate headlines and more European debt concerns take the S&P back down from it’s recent 2-year high. No major economic released are scheduled today or tomorrow but we get a barrel full on Wednesday and Thursday with GDP, existing home sales, durable goods, inflation numbers, jobless claims, consumer confidence and new home sales. Let’s hope we can sustain this rally in spite of a likely $99 Billion in auctions next week…

Mortgage rates improved today

2010-12-17T09:25:00.000-08:00

as mortgage bonds continue their improvement from yesterday. Today brought some positive economic news with Leading economic indicators showing marked improvement, and the passage of the pork laden tax-cut extension plan by the gridlocked house that President Obama is scheduled to sign later today. Both should be a boon for stocks, but so far today the dow is trading in negative territory. Only 7 shopping days left people!

Mortgage rates worsened today

2010-12-16T09:39:00.000-08:00

as mortgage bonds continue to selloff alongside Treasuries after continued positive economic data was released today. Initially bonds were positive and stock markets were in slightly negative territory, but origination and selling has picked up in very thin and volatile trading conditions. Clearly the market is still spooked from recent price action that has sent rates into 7 month highs in the last full trading week of 2011. Merry Christmas housing market!

Mortgage rates improved slightly today

2010-12-15T15:13:00.001-08:00

as mortgage bonds recover some losses from yesterday’s damage. Treasuries found a bid overnight as talk of a Spanish downgrade went out and continued as most of the slew of market data released today was close to expectations (see market headlines for details). However the consensus is any moves will be technical the likely trend is a continuation of the selloff. Mortgages are lagging Treasuries so far this morning although still improved in outright price. However, stocks are continuing to make gains as the bulls are in control and bonds appear to have an anchor around the neck, going ever deeper into negative territory. The Fed is not so willing to get on that train, omitting any acknowledgement of recent positive economic data to the consternation of some economists. The Fed still sees what appears to be obvious from this desk: jobs and housing are nowhere near recovery and, until they do, true economic recovery is not possible. On tap tomorrow: housing starts/building permits, jobless claims and Philly Fed. Stay tuned as bonds are under pressure at the moment, losing much of earlier gains. It appears volatile re-prices are going to be the norm for a while…

Mortgage rates improved today

2010-12-09T09:33:00.000-08:00

as mortgage bonds make gains this morning despite losing some of their earlier gains after better than expected jobless claim and wholesale inventory data was released. Buyers have emerged after recent massive losses, allowing mortgages to tighten with Treasuries but trade is choppy and volatile. Treasuries initially up have fallen to near unchanged in short end to slightly better in the longer end at the moment after the data releases, putting the 10-year yield around the 3.249% mark. Today brings the final leg of this week’s auctions with $13B of 30-year “long bonds” on the block—results due out around 10am. As the headline “House Democrats did not approve the compromise tax bill in its current form” came we are seeing some bond gains. Check out the last story in today’s Market Headlines—an interesting piece on whether the bond vigilantes of the late 80s and 90s that forced both the first President Bush and Bill Clinton to raise taxes to get budgets in line are doing the same thing to Obama.

Mortgage rates significantly worse again today

2010-12-08T09:27:00.000-08:00

as the bond selloff continues with a vengeance. It seems the tipping point was reached with the Obama tax cut compromise to get all the holdouts who were long Treasuries to finally capitulate. Japan dumped a sizable amount overnight leading to today’s push up in yield as the 10-year is now around 3.282% and mortgages lose another point. The economic data was merely continued falling mortgage applications; a painful reminder of current circumstances. Today brings a the 10-year auction with results due around 10am. Stay tuned and hold onto your seats…

Mortgage rates worsened today

2010-12-07T10:07:00.001-08:00

as mortgage bonds give up all of yesterday’s gains and more. Both mortgages and Treasuries are taking a beating as the risk on trade is back—the Dow is up over 35-points at the moment. Reasons range from Obama reaching a compromise on tax cut extensions to concerns over the deficit to higher than expected prepay numbers. Did anyone really think the tax cuts were not going to be extended? It’s day trading pure and simple. Economic news was of little import as its sell, sell, sell in bond land, pushing the 10-year yield up to 3.08% at the moment. Today brings the first of three auctions with $32B of 3-years on the block today—results due out around 10am.

Mortgage rates improved today

2010-12-06T09:25:00.000-08:00

as mortgage bonds and Treasuries get a boost from Bernanke’s comments on CBS citing additional QE is certainly possible if necessary. He indicated without QE and the Fed’s response to the crisis, unemployment could be 25%, not the 9.8% currently, and that it is likely not to decrease down to 5%-6% for 4 or 5 years. He sees inflation concerns overstated, won’t allow it to go above 2%, and believes the tax code must be revised. No economic data is scheduled today as stocks are slightly negative and the 10-year yield is near the 2.95% mark. This weeks brings another round of auctions with 32bn of 3-years on Tuesday, 21bn of 10-years on Wednesday and 13bn of 30-years on Thursday. The Fed bought another 2bn this morning.

Mortgage rates improved today

2010-12-03T10:45:00.001-08:00

as mortgage bonds and Treasuries get a boost from a disappointing Non-Farm Payroll report released today. The markets were expecting a much larger number based on earlier data that has rallied stocks and sent bonds further and further into negative territory over the last 3 weeks. Given the market was looking for 160k in added payrolls and we only got 39k and the unemployment rate actually increased, it is a bit surprising we are not seeing much of a stock selloff and the initial bond rally has now given up some of those gains. The markets are somehow still convinced that recovery is underway despite a stalled job and housing market. Add to that the potential effects of implementing the proposed deficit reduction plan on the lower and middle income consumers’ ability to spend and one can see the likelihood of a prolonged jobless recovery. Without a structural shift away from consumption dependency, it is hard to see how we can get out of this fix. Given that more stimulus is politically impossible, the Fed gave us QE2, purchasing another 6.8bn this morning in a continued effort to keep rates low. Let’s hope it’s successful. On tap for next week: more Treasury supply and the Irish budget vote. Stay tuned for more rate/price volatility folks…

Mortgage rates are level to slightly improved

2010-12-02T11:35:00.000-08:00

this morning as mortgage bonds erase earlier further losses, firming into positive territory as buyers emerge. The market didn’t get the big announcement from Trichet regarding a Euro zone style QE2 it wanted and jobless claims came in higher than expected. But retail sales data and better than expected pending home sales figures are keeping stock markets on a roll. The 10-year yield touched 3.00% but then backed off as bonds find a bid and the Fed bought back another 8.3bn. Let’s hope we found a bottom and can work our way back up. But the big jobs report tomorrow, if strong, could send us further down. Stay tuned…

Mortgage rates worsened today

2010-12-01T09:32:00.001-08:00

as mortgage bonds follow Treasuries deep into negative territory after strong domestic and overseas data was released this morning.. Stocks are rallying big and bonds are tanking from better than expected U.S. private sector job numbers, positive Chinese and British manufacturing data, and comments from ECB head Trichet suggesting significant measures may be taken soon to shore up the Euro-zone solvency concerns. In other news, mortgage applications plunged last week by the most this year, productivity increased and manufacturing activity continued to show signs of expansion. The Fed bought back another 8.174bn but you wouldn’t know it looking at rates today. Given the preliminary jobs number from today, some analysts are revising expectations for Friday’s big payroll report, so bonds could be in for more rough waters before the week is over. In addition to Novembers better than expected job estimates, October numbers were revised, suggesting job growth is beginning to take hold. Still these numbers are not enough to move the needle on the Unemployment rate. A big surprise to the upside in Friday’s numbers could be the tipping point traders are looking for. On tap later today: Fed beige book and auto sales figures; tomorrow: jobless claims and home sales data.

Mortgage rates improved today

2010-11-30T10:25:00.001-08:00

as mortgage bonds make gains with Treasuries, helped by growing Euro sovereign fears in a flight to quality. Treasuries are rallying given month end buying and lack of supply (no auctions) further boosted by the Fed buyback of 6.8bn this morning. Mortgages however are lagging and are not benefitting fully from these gains that pushed the 10-year yield down to 2.759% at the moment as hedge fund/money managers sell lower coupons. Stock market indices were down significantly to start today’s session but have since pared some losses after better than expected consumer confidence and business expansion data offset worse than expected home price figures. Tomorrow brings the start of employment data along with housing market and manufacturing figures…expect rate/price volatility.

Most mortgage rates are level today

2010-11-29T14:40:00.001-08:00

as mortgage bonds attempt to regain some loses from the pre-turkey day sell off in quiet trade. Today is pretty much data-less but get’s into full gear on Wednesday as employment data begins and ends with the big jobs report on Friday. Stock markets are down as the announced Irish aid package fails to ease concerns of greater euro contagion. In sympathy with “cyber Monday” shopping, the Fed was in buying another round of Treasuries to the tune of 2.17bn as the 10-year yield hovers around 2.839%.

Most mortgage rates worsened today

2010-11-24T09:04:00.000-08:00

as mortgage bonds and Treasuries get hammered after better than expected jobless claims data was released. Bonds are under pressure after a German bond auction failed overnight ahead of today’s 7-year offering. Stock market gains combined with thin trading conditions in a shortened week are only adding to the pressure as MBS are in a bit of a free fall, down almost a point at the moment. A ton of data was released today in order to squeeze it in due to the holiday: mortgage applications were up, durable goods orders were down; consumer spending was up, consumer sentiment was up, home prices fell and home sales were down. Focusing on jobless claims and high end retail positive earnings and Shrugging off the bad housing news and S&P downgrading Irish bonds, the Dow is up over 125-points and the 10-year yield is up at 2.883%.

Most mortgage rates improved today

2010-11-23T12:10:00.000-08:00

as mortgage bonds and Treasuries benefit from tensions between North and South Korea and fears of an Irish Bank run. Stronger than expected GDP numbers were overshadowed by these events as stock market indices are all down about 1.2% in trading this morning. Poor home sales data released today helped to firm this trend. Bonds are seeing some buying strength helping to push the 10-year yield down to 2.744% at the moment in this shortened holiday week. Today’s 5-year auction is expected to go well, but it is not clear whether it will help rates much with results due out around 10am. Fed minutes from this months FOMC meeting will be released around 11am. Stay tuned…

2010-02-02T10:10:00.000-08:00

Mortgages are slightly improved today as mortgage bonds trade modestly higher with Treasuries this morning in what is shaping up to be a very quiet and uneventful start to the week that ends with the biggie jobs report. The other number that will most likely move mortgage rates is Thursday’s prepayment report. Today’s news is little more than an unchanged report of existing home pending sales. Stock Markets are trading to the positive for a second day and bonds are holding their ground at the moment.

MBS: +6bps
Dow: +81.67 --- 10,267.00
Oil: +$2.36 --- $76.79

2010-01-28T14:59:00.000-08:00

Mortgage rates worsened today as mortgage bonds continue to lose ground after yesterday’s FOMC rate decision. Although the Fed decided to keep rates low for and extended period and offered no changes to the MBS program, Bonds did not take kindly to the text. Many blame the lone dissenter, Kansas City Fed President Hoenig, for not showing a united Fed determined to keep rates low. He is a known inflation hawk and his views should be no surprise, but markets will be markets. And now we find ourselves .250 to .375 worse post FOMC decision despite the stock markets losing more ground today. In news released today: Chicago Fed economic activity decreased in December while durable goods orders increased and jobless claims decreased. Overall not a bond friendly set of data. Today brings the last of this weeks Treasury auctions with $32 Billion of 7-year notes being offered up. Yesterday’s 5-year went well. Let’s hope the same for the 7s today. Results due around 10am. MBS attempted a recovery earlier but are stubbornly staying negative widening a bit to Treasuries…

MBS: +6bps
Dow: -115.70 --- 10,120.46
Oil: +$.022 --- $73.64

2010-01-26T09:27:00.000-08:00

Mortgage rates are level today as mortgage bonds trade near unchanged following Treasuries ahead of today’s 2-year auction (results around 10am). Initially improved this morning, bonds have lost some luster after the release of better than expected consumer confidence (nobody’s dancing in the street, they’re just “less gloomy”). And some good news on the housing front: home prices appear to have risen yet again for 6 months in a row. The asterisk to the data is to what extent the tax credit has distorted price levels. The MBS market continues to be a limited affair with the Fed buying up more than the non-government players can provide including us originators. The FOMC rate decision looms tomorrow and while all expect the funds rates to stay put, many are waiting to hear if the gravy train to which we’ve grown accustomed will continue or end as scheduled.

MBS: +7bps
Dow: +65.83 --- 10,262.69
Oil: -$0.51 --- $74.75

2010-01-22T13:35:00.000-08:00

Mortgage rates are level mortgage bonds widen a bit with somewhat weaker Treasuries. Stock markets opened up worse from yesterday’s selloff, but have since paired much of the morning’s losses, pressuring bonds. Today’s session is data less so bonds will be looking to the stock market movement which did not take kindly to President Obama’s proposed banking regulations (financial stocks, at least). The what, how and when isn’t clear so much speculation abounds. Adding fuel to the fire, Barney Frank proposed abolishing Fannie and Freddie in their current forms. Again, no details yet. Last but not least, mounting opposition to renewing Bernanke’s chairmanship is reaching new levels. Things are getting interesting folks…

MBS: -11bps
Dow: -216.90 --- 10,172.98
Oil: -$1.92 --- $74.16

2010-01-19T09:38:00.000-08:00

Mortgage rates are level with Friday’s rates as mortgage bonds open lower from Friday matching investor pull back pricing due to Monday’s market closure. Treasuries are trading lower as well after two days of gains. Not much in the way of economic data was released today but tomorrow brings producer inflation data and jobless claim numbers are due on Thursday. Bonds are firming a bit from earlier morning losses and the Dow is up about 80-points at the moment. Trading conditions are still thin so be prepared for continued volatility.

MBS: +10bps
Dow: +95.23 --- 10,704.88
Oil: +$0.05 --- $78.05

2010-01-13T09:35:00.000-08:00

Most rate prices are level with yesterday as mortgage bonds attempt to hold onto Tuesday’s gains as bonds are under pressure ahead of today’s 10-year Treasury auction. Yesterday’s 3-year auction went well and bonds benefitted. The market is stuck in a holding pattern as originator supply remains anemic allowing the Fed to easily soak up supply while servicers and private money remain on the sidelines. The big question marks looming in the next few months: will the Fed extend the buying program? Will the homebuyer tax credit be extended? Will Fannie and Freddie dump assets in adherence to new accounting rules? Will private money take up slack? Meanwhile the big guns of Wall Street are busy on cap hill explaining how we got ourselves into the mess we’re in…

MBS: -18bps
Dow: +43.23 --- 10,670.49
Oil: -$0.88 --- $79.91

2010-01-12T10:03:00.000-08:00

Mortgage rates improved today as mortgage bonds hold firm to Treasuries which are benefiting from a disappointing start of corporate earnings reports. Reports released this morning showing a widened trade deficit and gloomier small business confidence are also helping to shift gains from stocks to bonds as sentiment begins to shift towards a possible stall in economic recovery. Buyers have emerged this morning ahead of today’s $40 Billion 3-year Treasury auction as sellers remain in the wings including us originators pushing the 10-year benchmark yield down to 3.73% at the moment. The momentum has slowed a bit but another push is anticipated albeit of smaller proportion. We’ll see if buyer strength can offset the auction supply this week and keep rates moving lower. Inflation data in on tap for Thursday and Friday…

MBS: +46bps
Dow: -81.01 --- 10,582.98
Oil:-$1.21 --- $81.31

2010-01-11T09:52:00.000-08:00

Mortgage rates improved today as mortgage bonds trade in positive territory, tightening with Treasuries. The consensus views current MBS price levels as rich but as long as the Fed is able to keeping buying more than originators are selling its going along for the ride. What happens when the Fed stops buying MBS? Well, there have been whispers (Fed minutes and others) who suggest the program could continue past March. What if they don’t? Think back to the sneaker announcement on Christmas Eve from the Fed removing the funding cap on Freddie and Fannie’s portfolio size. Had the Fed not made this move, the GSEs would have had to shed a combined $150 billion in MBS assets for 2010 (and we know what happens with massive selling in MBS—rates rise). So not only do they not have to shed MBS, they could actually INCREASE their MBS portfolios. This could be the tonic the mortgage market will need when the Fed stops buying. Back to now: not much news this morning as bonds and stock market indices are slightly improved from last week.

MBS: +8bps
Dow: +2.42 --- 10,620.61
Oil: -$0.11 --- $82.64

2010-01-08T10:11:00.000-08:00

Mortgage rates improved from yesterday’s worsening (flat from yesterday's open) as mortgage bonds reverse some of Thursday’s losses. The December payrolls report was a mixed bag with the headline number coming in worse than expected, helping bonds initially. Reading into the details, November was revised higher, private sector services improved over gov’t and hourly wages with workweek gain give some continued hope things are improving. Still the labor force participation rate came in at the lowest since August of 1985; the unemployment rate sits at 10% with the real rate above 17%. Second stimulus anyone? MBS initially rallied off the news but have since retreated; resting above yesterday’s closing levels. Treasuries too have retreated from this morning as the 10-year sits unchanged with a yield of 3.828%. MBS prepayment speeds were released showing a pickup from November—not good news. However analysts believe it is unlikely the GSE will not execute a sudden mass buyout in their adoption of new accounting rules. This could trigger significant turbulence in MBS pricing and would be counter productive to the Fed’s efforts to reduce borrowing costs.

MBS: +22bps
Dow: -20.11 --- 10,586.75
Oil: +$0.29 --- $82.95

2010-01-07T10:15:00.000-08:00

Mortgage rates held steady today as mortgage bonds maintain Wednesday’s worsened levels as they track Treasuries this morning tick for tick as the market shrugs off today’s better than expected jobless claim data. What happened on Wednesday? Treasuries sold off for a variety of reasons including hedge unwinds related to pricings, nervousness ahead of Friday’s payrolls number, and inflation concerns stoked by a paper from the St. Louis Fed. The good news is MBS are at 17-year tights with Treasuries, helping to keep rates lower than they otherwise would be. Most attribute this tightening to the Fed’s MBS purchase program, which they hinted yesterday in the minutes released might be expanded if the economy doesn’t improve. Bucking the general consensus, is a report done by the National Bureau of Economic Research which found the Fed program “…has no significant effect” in influencing risks of prepayment and defaults—a key factor in determining MBS spreads with Treasuries. Some would contend the near disappearance of the cash out refi due to stricter underwriting has done more to limit prepayments and thus reducing the effectiveness of the Fed’s efforts to push rates lower. There is some truth in this: a 0% interest rate doesn’t really help a borrower who can’t qualify… or who doesn’t’ have a job. Speaking of, the biggie employment report is on tap tomorrow. Stay tuned…

MBS: -9bps
Dow: +6.42 --- 10,580.10
Oil: -$0.50 --- $82.68

2010-01-06T10:32:00.000-08:00

Mortgage rates worsened today as mortgage bonds give back some of yesterday’s gains. Initially bonds were slightly positive but then fell back as Treasuries take it on the chin after ISM data reflected expansion and jobless claims fell to their lowest since March. Worse than expected payroll data failed to keep Bonds in positive territory as data continues to paint the picture “things are getting less bad”. Of course data often has nothing to do with market direction as we remain in a day trading environment of profit taking while the Fed continues to prop things up. The market continues its sleepy holiday funk as investors wait for us originators to awaken with some supply.

MBS: -31bps
Dow: -1.67 --- 10,570.35
Oil: +$0.99 --- $82.76

2010-01-04T09:18:00.000-08:00

HAPPY NEW YEAR!!

Mortgage rates are improved today as mortgage bond prices are improving alongside stocks. It’s the first trading day of 2010 and data was mixed. Manufacturing has shown an increase in December, which should be a signal for economic strength, but the housing report was less than favorable. It showed construction spending at its lowest level in 6 years. Now we get to hear the analysis, and top 10 lists of everything that happened in 09' for the next 5 weeks! But when that's done, lets all look forward to having a wonderful 2010!

MBS: +17bps
Dow: +156.36 --- 10,584.41
Oil: +$1.90 --- $81.26

2009-12-28T09:25:00.000-08:00

Most rate prices worsened again today as mortgage bonds continue their holiday slide alongside Treasuries--with benchmark yields reaching the highest in nearly six months as investors sold holdings to cheapen prices ahead of another big round of government debt issuance this week. Money managers and hedge funds continue to sell the lower coupon MBS causing much of the widening we’ve seen recently. No major economic data was released today as we begin another shortened week ahead of a holiday. In other news, the Treasury announced it would uncap the credit lines for Fannie and Freddie in an effort to reassure private investors the government is fully behind the agencies. Sobering news: both Citibank and Deutsche Bank analysts are projecting another 10% decline in property values.

MBS: -26bps
Dow: +11.94 --- 10,532.04
Oil: +$0.68 --- $78.73

2009-12-21T09:35:00.000-08:00

Mortgage rates worsened today as mortgage bonds follow Treasuries into a snow drift as the Dow rallies over 100-points at the moment. It’s a holiday week and the out of office routine is upon us—market trading is likely to be erratic and directionless. Little economic news was released today but we’ll get the meat and potatoes of data squeezed into the next 3 days of this shortened week as Thursday is an early market close and Friday will be closed all day for the Christmas holiday. So far the market doesn’t seem to be in a gift giving mood.

MBS: -46bps
Dow: +118.73 --- 10,447.62
Oil: -$0.36 --- $73.00

2009-12-17T11:13:00.000-08:00

Mortgage rates improved again today as mortgage bonds pick up some steam, buoyed by a rally in Treasuries. Bonds are benefiting from Greece’s rating cut and worse than expected job data released this morning. The Fed kept the funds rate unchanged as expected and reiterated its pledge to keep rates low for and extended time period given the significant economic headwinds that remain, despite some recent improvement. Of particular significance, they affirmed the current timeline to expire the MBS purchase program will remain end of Q1 2010. Not surprisingly, stocks are not taking kindly to the employment news with the Dow down over 100-points at the moment, further giving bonds a lift. Much of the recent slide of the last few days has been erased in today’s rally. Let’s see if it’s got any legs…

MBS: +56bps (nice!)
Dow: -105.65 --- 10,335.47
Oil: -$0.47 --- $72.22

Fed Update!

2009-12-16T11:25:00.000-08:00

Fed to leave benchmark rate range unchanged at 0-.25% -- Keeps current schedule for phasing out MBS purchase program by the end of 1st quarter 2010. What does this mean? Prime rate (which affects shorter term credit such as credit cards, auto loans and home equity lines of credit) will remain @ 3.25%. The Fed feels that inflation is in check therefore doesn't need to ratchet up rates YET.

As for the phase out of the MBS purchase program -- this will result in the inevitable upward trend in long term rates (mortgages). The Fed purchase program has created artificial demand for MBS, thus resulting in historically low rates. As soon as this 'demand' drops off, rates will increase.

2009-12-16T09:20:00.000-08:00

Most rates are unchanged to slightly better today as mortgage bonds hold and firm Tuesday’s prices, ending the recent slide—for the moment—ahead of today’s Fed rate decision/announcement. Volatility should be tame until the announcement scheduled for 11:15am and then its open season as traders will digest and react to any hint or wisp of a change for the better or worse. A host of economic data—mostly in line with expectations--was released first thing today and none of it moved the market from benign consumer inflation data to slow but steady housing starts. The one standout: global confidence is through the roof. The recent slide in MBS is largely due to Servicers adjusting their portfolios and good ol’ profit taking. Much of the selling pressure from these two forces should subside soon and hopefully translate into lower rates—at least for the short term as most expect rates to rise in 2010.

MBS: +15bps
Dow: +30.16 --- 10,482.16
Oil: +$2.36 --- $73.05

2009-12-15T09:27:00.000-08:00

Mortgage rates worsened today as mortgage bonds lose some ground with Treasuries after disappointing inflation data was released this morning. The Producer Price Index had the largest yearly increase since October 2008 coming in at 2.4% while the core rate rose to 1.2% over the year (excludes food and energy prices). Disappointing too was news of the worst conditions since July for New York region manufacturers. Industrial Production numbers provided some relief indicating the strongest showing in 3 months. With these data sets nobody is really happy today as both stocks and bonds are negative, providing a context for the Fed to start is two-day meeting. All eyes and ears will be waiting to hear any signs of policy change tomorrow. Currently we find the benchmark 10-year Treasury yield the highest since August sitting above 3.6%.

MBS: -39bps
Dow: -25.39 --- 10,475.66
Oil: +$1.13 --- $70.64

2009-12-14T11:14:00.000-08:00

Mortgage bonds opened relatively un-changed today, holding rates fairly steady from Friday. There is no economic data scheduled for release, possibly keeping movement to a minimum. President Obama is holding court with some Wall Street execs today, likely to discuss his disgust for recently announced bonus payments, and lack of consumer lending. 3 more bank failures were announced this weekend, and more are assumed to be on the horizon. CPI, and consumer confidence data will be released later this week. It should be interesting to see how the market reacts to these inflationary data items. Dow's up 23 at the moment, and mortgages are holding steady from open.

MBS: 0bps
Dow: +30.99 --- 10,502.49
Oil: -$0.30 --- $69.57

2009-12-11T10:52:00.000-08:00

Mortgage rates worsened again today as mortgage bonds follow Treasuries into negative territory. News released today of better than expected retail sales and robust industrial output in China has investors moving from bonds into stocks. Most of the gains this week after last Friday’s losses are now gone and the benchmark 10 year yield has pierced the 3.50% mark as the curve steepens with investors favoring the short end. This isn’t good news for mortgage rates.

MBS: -16bps
Dow: +55.39 --- 10,461.22
Oil: -$0.57 --- $69.97 (under $70)

2009-12-10T08:53:00.000-08:00

Most rate prices are worse again today as mortgage bonds lose more ground as we work our way through this week’s Treasury auctions. Today brings the 30-year auction and there are whispers it might be better bid than the previous two. Let’s hope so as MBS continue to lose ground at the moment. Results due around 10am. This morning we find Treasuries down across the curve as the 10-year yield tics back up towards the 3.50% mark. Stocks are positive again today buoyed by data showing our Trade balance narrowed and, while initial jobless claims rose, those on extended benefits shrank in number. Tim Geithner is back on Capitol Hill answering to the Congressional Oversight Panel.

MBS: -36bps (ouch)
Dow: +75.28 --- 10,412.33
Oil: -$0.09 --- $70.58

2009-12-09T09:42:00.000-08:00

Mortgage rates worsened a bit today as mortgage bonds continue to slide from yesterday’s post auction weakness. Treasuries are barely holding onto positive territory as MBS begin to widen to their benchmark. The 10 Year yield is currently resting at 3.39% as it teeters between the 3.25 and 3.5 range. Stocks after taking a hit yesterday are modestly positive with the Dow up over 25-points at the moment. Markets reacted very little to both increased Mortgage Application and Wholesale Inventory data. On tap is the $21 Billion 10-year auction. Hopefully it will go better than yesterday’s 3-year and give us a little boost. Results due around 10am.

MBS: -11bps
Dow: +2.91 --- 10,288.88
Oil: -$1.55 --- $71.07

2009-12-08T09:44:00.000-08:00

Mortgage rates are slightly improved today as mortgage bonds opened strong but have since retreated. Low supply from originators is keeping the Fed’s job of buying up MBS an easy one and rates show it. Treasuries are up ahead of today’s 3-Year auction, expected to go well, with results around 10am. MBS rallied up earlier this morning but have receded from the highs—we’ll see if the auction results move us back there and beyond. Bernanke’s speech yesterday was peppered with a sobering message to Wall Street: not so fast. Stocks continue to lose ground today as a few key companies report disappointing outlooks and sales data.

MBS: +9bps
Dow: -92.35 --- 10,297.76
Oil: -$1.25 --- $72.68

2009-12-07T10:34:00.000-08:00

Most rate prices are improved this morning as mortgage bonds make small gains, building on their attempt to claw back from Friday morning’s hard drop. Treasuries are positive as well as the yield on the 10 year hovers below the 3.50% level. Even the stock markets are positive today as analyst upgrades for 3 credit card companies are overshadowing the market jitters ahead of Bernanke’s 9:45am speech today. Traders are anxious to hear what Ben might say about unwinding the stimulus we’ve all come to rely on. Not much major economic data this as Fed speak and $74 Billion of 3-year, 10-year and 30-year auctions dominate.

MBS: +30bps
Dow: +45.34 --- 10,434.24
Oil: -$0.52 --- $74.95

2009-12-04T11:51:00.000-08:00

Rates are yet again higher today (they've taken a beating this week), as traders actually paid attention to the economic data today, beating mortgage bonds further down. Unemployment came in better than expected, and factory orders rose much stronger than anticipated. Both report results are bad for bonds as they signal an improving economy. Fed Chairman Bernanke outlined his potential plan for tightening monetary policy in the future. While still a ways away from implementation, discussion of this subject seems to have spooked those in the fixed income market (bonds).

MBS: -47bps
Dow: -14.06 --- 10,352.09
Oil: -$0.85 --- $75.61

2009-12-03T09:41:00.000-08:00

Mortgage rates are higher yet again today. Mortgage bond prices fell this morning adding to the recent losses pushing mortgage interest rates higher. Weekly jobless claims came in at 457k, not as weak as the expected 480k mark. The bond market typically likes to see higher than expected unemployment. This not as bad as expected data generally signals the economy is recovering on the job front. Revised Q3 productivity rose 8.1%, not as strong as the expected 8.5% increase. Meanwhile Fed Chairman Bernanke is on the hill testifying for his job. Feelings are mixed about whether or not he’s done a good job, but it is expected that he will keep his post.

MBS: -30bps
Dow: -0.75 --- 10,451.93
Oil: -$0.04 --- $76.56

2009-12-02T10:17:00.000-08:00

Mortgage rates are higher today, as mortgage bonds continued their deterioration from yesterday afternoon. ADP employment came in worse than expected for November, but October numbers were revised to show improvement from the initial report. Mortgage applications were up last week, likely due to the historically low interest rates we’re seeing. Beige book is on tap this afternoon, which may cause some market movement. Tomorrow brings a Senate hearing on whether to elect “Helicopter Ben” for another term as Fed Chairman.

MBS: 0bps
Dow: -28.57 --- 10,443.01
Oil: -$1.72 --- $76.65

2009-12-01T09:19:00.000-08:00

Mortgage rates worsen, as mortgage bonds are erasing the gains from yesterday afternoon. ISM Index came in lower than expected at 53.6. Construction spending was unchanged, stronger than the expected 0.5% decline. Pending Home Sales rose a shocking 3.7%, much higher than the expected 1.0% decline likely due to low rates, and the expanded home buyer credit. The ADP employment report, and the Fed’s Beige book are on tap later this week.

MBS: -31bps
Dow: +131.95 --- 10,476.79
Oil: +$1.44 --- $78.72

2009-11-30T09:43:00.000-08:00

Mortgage rates have held steady or are slightly improved from Wednesday’s levels. The mortgage market has remained range-bound as of late. Last week, the markets were hit with news that Dubai World, asked creditors for a six-month stay on repayment of $60B in debts. The news of the interest repayment delay caused the Asian and European equity markets to sell off on Thursday, however the U.S. markets were closed for a holiday. Traders across the globe are trying to assess bank’s exposure to Dubai World. It is believed US banks have limited exposure in the project. There are reports that the United Arab Emirates' (UAE) central bank is making funding available to back its banks in the face of potential defaults. This is resulting in a bit of a reversal from Friday's positive movements in mortgage bonds.

MBS: +0bps
Dow: +31.13 --- 10,278.79
Oil: +$0.06 --- $76.11

2009-11-25T09:51:00.000-08:00

Mortgage rates edge higher as mortgage bonds are struggling to hold onto gains from Tuesday weighed down by Treasuries negative movement this morning. Stock markets are positive today following mostly positive economic data: stronger consumer spending, improved new home sales and lower jobless claims. Only durable goods orders disappointed. Mortgage apps declined last week despite record low rates as the number of eligible refinances gets smaller and smaller. This lower production is allowing the Fed to continue to keep MBS supply under control and rates low. Be careful today as prices are likely to fade into the holiday close and current levels are prime target range for profit taking…

MBS: -10bps
Dow: +15.42 --- 10,449.13
Oil: +$1.06 --- $77.08

2009-11-24T09:38:00.000-08:00

Mortgage rates improved today as mortgage bonds hold onto yesterday afternoon’s gains, continuing the trend of slowing grinding higher and tighter with Treasuries. Revised GDP numbers came in largely as expected but an unexpected improvement in consumer confidence has the Dow paring some earlier morning losses. Following yesterday’s strong home sales numbers we find home prices rose for a fourth straight month. On tap today we have the $42B 5-year auction with results expected around 10am.

MBS: +11bps
Dow: -51.92 --- 10,399.03
Oil: -$1.54 --- $76.01

2009-11-23T11:50:00.000-08:00

Mortgage rates are near unchanged this morning (but improving as the day moves along) as mortgage bonds continue to trade in a narrow range, holding level while Treasuries exhibit more ups and downs. This week brings significant auctions starting today with $44 Billion of 2-year notes. The auctions are expected to go well but whether that moves rates in any significant way is yet to be seen. MBS have been strangely level despite movements in stocks, Treasuries or the daily onslaught of economic data. This trend may begin to break as we get closer to year end as flows recede and books begin to close out--greater volatility and choppiness is probable. On a positive note, two fed presidents made comments suggesting the Fed is likely to keep rates low for an extended time and may even extend the MBS purchase program beyond the current March expiration timeframe. Wouldn’t that be a nice Christmas present for our industry? In news today existing home sales came in better than expected with the best pace in 2 ½ years. Now that is good news! At the moment rallying stocks and the impending auctions are pressuring Treasuries, but MBS are holding in firmer and tighter.

MBS: +18bps
Dow: +126.51 --- 10,444.67
Oil: -$0.74 --- $76.72

Week in Review / PREVIEW

2009-11-22T20:51:00.000-08:00

We apologize for the downtime; we are back online with daily updates.

LAST WEEK
Bernanke's speech Monday to the NY Economics Club he reiterated he would keep rates low; essentially admitted he has little insight as to how the economic recovery will unfold and remarked "The best thing we can say about the labor market right now is that it may be getting worse more slowly." In layman speak, he isn't sure the unemployment situation is at its bottom.

Housing starts crumbled, down 10.6%, permits -4.6%. With mortgage rates well below 5.00% (with a fee) purchases were down and re-finances were lower according to the MBA data released on Wednesday. Oct retail sales were surprisingly weak.

Mortgage prices and mortgage rates were literally unchanged this past week. The DJIA up 48 points, NASDAQ -22, and S&P -2. Crude oil +$0.27, gold +$45.00.

NEXT WEEK
a short one with Thanksgiving on Thursday and markets closing early on Friday. However, it is packed with key economic reports and $118B of Treasury auctions. After a flat week last week, this week may force a directional change in the otherwise stable rate markets for the past two months. Start with the equity market, getting shaky in the view the economy will rebound rapidly and beginning to think that the advance in stocks has over-run the reality of valuations and excessive bullishness. Q3 GDP revision comes on Tuesday with a downward revision; from that gaudy 3.5% growth reported on the advance GDP look last month, to 2.9% with some looking for 2.5%. Yes, it is Q3 and we are two-thirds through Q4, but Q4 is already weaker than Q3 with no cash for clunkers and a slipping housing sector. The economic outlook is softening; if that translates to a run on equities the bond and mortgage markets will have a nice ride on safety moves. Then there is the dollar, after falling for months it appears the buck may be basing and may lead to a temporary bounce. If the buck does improve it will add more pressure to equities and unfortunately the bond market as well. Look for increased volatility this week with thin volume. Retail sales will be the key focus on consumer spending but we won't know much until next week.

2009-11-13T09:49:00.000-08:00

Mortgage rates improved again today as mortgage bonds continue to move higher and tighter with Treasuries thanks to the Fed’s devouring of limited originator supply ($3B vs. $2B on Thursday). Yesterday’s long bond auction was less than stellar as expected but MBS flinched for a minute and then rallied back to achieve highs of the day. This morning we continue to build on those levels as negative consumer sentiment data hit the wires earlier today, signaling a challenging holiday season for retailers. Despite this news the Dow is up over 75-points as solid earnings reports trump sentiment data.

MBS: +11bps
Dow: +96.81 --- 10,294.28
Oil: -$0.05 --- $76.89

2009-11-12T10:54:00.000-08:00

Mortgage rates returned to Tuesday’s pre-holiday levels ahead of today’s 30-year auction. Bonds are showing some strength despite better than expected jobless claims data released this morning. Stock markets are down as a sobering outlook from Wal-mart on the challenges consumers are facing overshadows the job data. So for now we wait for the auction results and its effect on rates.

MBS: +7bps
Dow: -57.29 --- 10,233.97
Oil: -$2.20 --- $77.09

2009-11-11T09:30:00.000-08:00

Mortgage rates are slightly worse today as investors price conservatively due to the bond market closure for the Veteran’s Day holiday. Yesterday’s $25 Billion 10-year auction was decently bid but did little to dampen caution ahead of tomorrow’s 30-year note sale which is not expected to go well. Investors are bidding up the short end of the curve in anticipation of inflation as Monday’s 3-year sale demonstrated. The Dow is up a modest 24-points at the moment.

MBS: no trading today
Dow: +24.03 --- 10,271.00
Oil: -$0.28 --- $78.77

2009-11-10T11:02:00.001-08:00

Mid day reprice for the worse.

MBS: -31bps

2009-11-10T09:18:00.000-08:00

Mortgage rates improved today following yesterday's late day gains in mortgage bonds -- MBS down slightly this morning. Yesterday’s well bid auction is followed up today with a 10 Year sale. The results and whether or not stocks can sustain their gains is likely to provide direction for rates today. We do have 4 Fed officials on the stump today—always a possibility to turn some tables. In the meantime, Fed buying is more than keeping up with supply keeping rates low.

MBS: -14bps
Dow: -3.40 --- 10,223.54
Oil: -$0.20 --- $79.24

2009-11-09T11:22:00.000-08:00

Most rates are holding steady from Friday afternoon’s improvement. The G20’s affirmation of continued fiscal stimulus seems to have boosted the markets. Mortgage bond prices are holding their recent gains despite a rallying Dow that is up over 150pts so far today. This week brings another set of record setting auctions. With 3, 10, and 30 year notes to be offered, the shorter term 3 year treasuries are expected to bring the best results. The bond market will be closed on Wednesday in observance of Veteran’s day, shortening the trading week, and pushing the 30 year auction to Thursday.

MBS: +9bps
Dow: +178.66 --- 10,202.08
Oil: +$2.05 --- $79.48

2009-11-06T09:19:00.000-08:00

Mortgage rates are improved this morning. Data released was a “mixed bag” in how it relates to bonds. Employment came in worse than expected at 10.2% (highest since 1983), but average hourly wage increased more than expected. Wholesale inventories continue to fall, possibly signaling a strengthening consumer. The Dow has been see-sawing between positive and negative territory all morning. Mortgage bonds have also been very volatile, although have an overall positive trend. More debt auctions to come next week, we’ll see how they’re received.

MBS: +15bps
Dow: +15.57 --- 10,021.53
Oil: -$2.24 --- $77.38

2009-11-05T09:24:00.000-08:00

Mortgage rates improved today as mortgage bonds hold onto yesterday’s post FOMC levels, as they continue to firm, tighten with and generally outperform Treasuries. Bonds are gaining ground in spite of better than expected economic data released this morning--in the form of 6 year high productivity gains and fewer jobless claims--and a Dow soaring up over 150-points. We don’t see stocks and bonds moving together often, but who’s complaining given all the economic data, expected bullish jobs report due tomorrow and next weeks looming auctions starting Monday—not a typical bond friendly environment.

MBS: +19bps
Dow: +160.74 --- 9,962.88
Oil: -$0.83 --- $79.57

2009-11-04T13:47:00.000-08:00

Fed to leave target rate range un-changed as expected, pledges to keep rates low for an "extended period".

This affects Prime rate which in turn affects short term credit like credit cards, auto loans and lines of credit. It does not affect long term credit or mortgage rates.

2009-11-04T09:17:00.000-08:00

Most rate prices are slightly worse this morning as mortgage bonds trade below Tuesday’s closing levels. Bonds have attempted to claw back a few times since losing ground after private sector job data was released earlier today. The Dow gains over 115-points off of positive service sector and job data. All of this ahead of the FOMC rate decision later this morning… All eyes and ears will be looking for any hints or whispers from the Fed as to the timing of any pullout of stimulus. They are widely expected to hold steady in policy. BIG Employment data on Friday…stay tuned.

MBS: -5bps
Dow: +111.09 --- 9,883.00
Oil: +$0.52 --- $80.12

2009-11-03T09:15:00.000-08:00

Most rate prices are worse today as mortgage bonds continue to lose ground, following Treasuries into negative territory. Earlier bonds were attempting to regain some losses but fell back as better than expected Factory Order data was released. The Dow remains negative as negative news on the semiconductor and financial sectors is trumping the factory data at the moment. The Fed begins its FOMC meeting today with its statement on tap tomorrow with most expecting the Fed to keep its easy policy intact for now. The big daddy Employment report comes Friday, and while the job loss for October is expected to be less than September, the unemployment rate could touch 10%--a daunting number indeed. Until then we are likely to see the market trade sideways in lower volumes.

MBS: -9bps (MBS closed down 25bps yesterday)
Dow: -63.56 --- 9,725.88
Oil: +$0.62 --- $78.75

2009-11-02T09:33:00.000-08:00

Most rate prices are near unchanged this morning as mortgage bonds start out losing ground, then improve, then fall back a bit after the release of better than expected data. Treasuries are taking a hit while stocks strengthen in yet another reversal. This back and forth movement is a telling sign of the reality of increased volatility as market participants debate the shape and form and timing of recovery, and the impacts of anticipated decreased Fed intervention. Busy news week culminating in the employment report on Friday.

MBS: -11bps
Dow: +60.31 --- 9,773.04
Oil: +$1.24 --- $78.24

2009-10-30T09:20:00.000-07:00

Mortgage rates are improved from yesterday’s re-price for the worse as mortgage bonds regain some losses, as Treasuries rally and stocks recede—the exact opposite of what they did yesterday. We can cite poor consumer spending data and less than rosy consumer sentiment numbers but we’ve seen this pattern day (trading) after day (trading). This up and down has some feeling tricked and not treated. But it’s month end, rates are lower and its Friday—be happy! Happy Halloween!

MBS: +24bps
Dow: -157.19 --- 9,805.39
Oil: -$1.42 --- $78.45

2009-10-29T10:18:00.000-07:00

Mortgage rates are worse today as mortgage bonds fail to sustain all of Wednesday’s gains, following Treasuries into negative territory after positive GDP and jobless data was released this morning. The Dow is up over 100-points after several days of negative movement as analysts declare the recession over. (Just ask someone looking for a job if the recession is over) One thing we know is over: The Fed officially ends it’s $300 Billion Treasury purchase program today. Thankfully they are still buying MBS helping to keep rates low.

MBS: -31bps
Dow: +150.24 --- 9,912.93
Oil: +$2.68 --- $80.14

2009-10-28T09:42:00.000-07:00

Mortgage rates improved today as mortgage bonds build on yesterday’s gains helped by lower Treasury bond prices after the well bid 2 Year auction and negative home sale data released this morning. We broke below the 10-Year yield of 3.500% yesterday and are trading just above 3.400% The Dow is down over 25-points at the moment as overseas bellwether companies reported negative results and domestic home data is overshadowing positive durable goods orders. On tap today is the 5 Year auction with results later this morning. Stay tuned…

MBS: +25bps
Dow: -55.32 --- 9,826.85
Oil: -$1.97 --- $77.58

2009-10-27T11:33:00.000-07:00

Mortgage rates improved this morning as mortgage bonds trade a bit higher alongside Treasuries as disappointing consumer confidence data was released. Yesterday both stocks and bonds headed south to start the week of record supply with another series of debt auctions. The benchmark 10 year yield broke through the 3.500% level and currently sits just above it. Currently bonds are firming up and the Dow is positive but off its highs ahead of the 2 year auction. Stay tuned for results later.

MBS: +32bps
Dow: +30.53 --- 9,898.49
Oil: +0.69 --- $79.36

2009-10-26T09:43:00.000-07:00

Mortgage rates are worse today as mortgage bonds are trading lower. The Treasury is preparing for another record auction today which is sending mortgage bonds into the negative. There are 3 total debt auctions this week, and the Fed’s Treasury buyback plan is scheduled to end on Thursday. The Dow opened up, then rallied but has since fallen sharply as the dollar showed strength against the euro. There’s no major data set for release today, leaving market movement likely up to the auction results.

MBS: -13bps
Dow: -79.88 --- 9,892.30
Oil: -1.78 --- $78.72

2009-10-23T12:10:00.000-07:00

Most rates are a bit worse today as mortgage bonds sell off alongside Treasuries. Treasuries are taking a hit ahead of next week’s record auction. Also weighing on Treasuries was an article in the Financial Times saying the Fed was considering changing the language of its policy statement so that it would be less jarring to markets if it had to move quickly to raise rates if price inflation becomes a problem. The article said the central bank is considering softening the language of its commitment to keep rates exceptionally low for an "extended period."

Stocks are taking it on the chin despite a jump in existing home sales data and Microsoft’s earnings smashing Wall Street expectations.

MBS: -27bps
Dow: -188.65 --- 9,962.66
Oil: -0.69 --- $80.14

Tax Credit Update

2009-10-21T14:27:00.000-07:00

Senate Panel Weighs Options for Extension Of $8,000 Home Buyer Tax Credit Program

Senate Banking Committee members Oct. 20 endorsed in principle a proposal to extend a popular home purchase tax credit that is slated to expire at the end of November. In testimony at a committee hearing on the state of the nation's housing market, Sen. Johnny Isakson (R-Ga.), the principal sponsor of the existing $8,000 credit for first-time home buyers, advocated continuing the benefit through June 30, 2010, and expanding it to any taxpayer who earns less than $150,000 per year or to couples earning less than $300,000 per year.

Committee members on both sides of the aisle voiced support for the idea, including Chairman Christopher Dodd (D-Conn.), who worked with Isakson to advance his proposal. Dodd noted that the existing tax credit, which was adopted earlier this year as part of an economic stimulus package, already has been used by 2 million first-time home buyers. Some senators who addressed Isakson during the hearing reserved judgment on the specifics of the proposal or asked him about possible tweaks designed to target it to certain purposes. Sen. Jeff Merkley (D-Ore.) asked Isakson, “Is there any case to be made for a permanent extension at some lower level of a tax credit for first-time home buyers?”

“That's a good question,” Isakson said. “There might be a case for a narrow focus, but I personally think you would lose all the value of the tax credit if it became a permanent, accepted credit in the general marketplace.” Isakson said one of the reasons the program has been successful so far is that when potential buyers know it will expire on a given date, they become motivated to wrap up a home purchase. Nevertheless, he told Merkley, “In answer to your question, it might be targeted at the low end in certain cases; it might make a difference and that might be something to look at in terms of helping people.”

Administration Supports Incentives
Housing and Urban Development Secretary Shaun Donovan, also addressing the committee, said the administration is committed to working with Congress “to fashion the most effective home buyer incentives” but stopped short of endorsing any particular home buyer credit. “At the same time, I'm mindful these proposals can be expensive, especially at a time of significant budget deficits,” Donovan said.

Dodd asked Donovan to expand on his prepared comments about the tax credit proposal, given the near-term expiration date of the current program. Donovan replied that the administration agrees the credit has offered benefits to the housing market, but added, “[T]o truly understand the cost, we will not know that until Americans have filed their tax returns. And so we feel it is very important within the administration that we gather as much data as we possibly can in advance of that before we make a final decision about whether the tax credit should be extended and, if so, exactly what that shape should look like.”

Donovan said administration officials are gathering data to help determine the prospective cost of the program, noting that it should be able “within the next few weeks” to decide whether it will support an extension proposal.

Urgent Need for Decision
“We understand the urgency of the situation,” Donovan said.
Another witness, Ronald Phipps, a realtor and first vice president of the National Association of Realtors, lauded the tax credit, claiming it has been responsible for 350,000 to 400,000 home sales this year. He underlined the need for a decision to extend the credit soon. “We need this done now,” Phipps said. “The average closing takes 45 days; we are at threshold. If you do not act immediately, then sales will wane.” He said his office is writing offers that are contingent on closing by Nov. 30 or the sale agreement will be null and void and the potential buyers will not receive the credit.

“I cannot overstate the immediacy now,” Phipps told the panel. “You need to act on the extension today, now, now, now.” Apparently alluding to Donovan's comments that the administration is looking at data on the program's cost, Phipps added, “In two weeks, three weeks, when the reports come in, it's too late.”

Worst Housing Recession Since WWII
David Crowe, chief economist for the National Association of Home Builders, said the current housing recession is the “worst since World War II,” with starts down from 2.3 million in 2006 to an annualized rate of 488,000, a decline of nearly 80 percent.

The downturn in starts and housing prices in recent years has improved affordability, Crowe said, and that should have resulted by now in an uptick in transactions and starts. “However, this has not occurred as strongly as history would suggest because consumer confidence is still so deeply shaken,” Crowe said, noting that restrictions on credit and problems with appraisals also have played roles in suppressing market activity.

‘Glimmers of Hope.’
Despite recent “glimmers of hope” for recovery in the housing market, Crowe said the market also suffers from an overhang of inventory that is continually fed by mounting foreclosures and ongoing job layoffs. Crowe also praised the home purchase tax credit. His group's estimate of its impact on the market was more conservative than the NAR estimate; NAHB credits the program for stimulating at least 200,000 home sales and generating at least 187,000 jobs. NAHB supports an even more ambitious tax credit than the one Isakson has proposed, according to Crowe. The home builders advocate extending the program until Dec. 1, 2010, and making it available to any taxpayer. Earlier, Merkley noted that Isakson's vision of a credit that would expire at mid-year would mean the program would end at a time when the economy will still be struggling to pick up momentum.

“I think we're still going to be deep in the woods, if you will, in the middle of 2010,” Merkley said, asking Isakson, “Will it really be feasible at that point to have a significant tax credit disappear in the middle of the year, or would it be better to have it at some more modest level and extend it through the balance of 2010?”

Isakson replied that he has learned legislation is the “art of the possible,” and that he believes neither Congress nor the Obama administration is likely to support a home buyer tax credit that extends beyond June 30, 2010. In defending the rationale for the credit as he proposed it, Isakson said, “Real estate is an interesting dynamic and once you have a confidence level in values, you will recover relatively quickly.”

2009-10-21T13:10:00.000-07:00

Trend reversal, mortgage backed securities improve on the day. Mortgage rates repricing for the better.

MBS: -3bps

2009-10-21T09:51:00.000-07:00

Most rates are significantly worse today as mortgage bonds follow Treasuries down as profit taking and the day trading mentality erase gains from earlier in the week. Stock markets are positive after well received earnings reports were issued.

MBS: -28bps
Dow: +43.15 --- 10,084.63
Oil: -0.52 --- $78.82

On the mortgage front....

2009-10-20T15:17:00.000-07:00

Mortgage rates on 30 year fixed mortgages continue to remain steady at incredible and historic lows; so steady in fact that people have become accustomed to these rates. In many cases this rate-steady market has lulled people into inactivity. Perhaps waiting on the sideline to see what will happen next. If you’ve been contemplating a purchase as a first time home buyer, investor or move-up-buyer, don’t miss the built-in savings that this environment is creating.

What does that mean exactly? Let’s just say you are a move-up-buyer and you are selling your home to buy a bigger, better home; your dream home. Now let’s say you thought your current home was worth $250,000 but you’re hearing that there has been a 10% reduction in price. “That’s outrageous! I’m not going to sell at the bottom,” you think to yourself. But what about the new home…. What does it look like in the same market – 10% less. Your home that was worth $250,000 is now worth $225,000. BUT, the home that you want, was worth $350,000 and now it’s worth $315,000. You are ahead $10,000 in a down market.

Add to this the incredible rate environment and seller concessions and that $350,000 dream house is more affordable than ever! In today’s rate environment for every $100,000 borrowed, your cost of money is over $100/month cheaper than it has historically averaged over the past 50 yrs.

The opportunity is now! Rates remain low, but will they continue? The problem is that this rate environment is artificially low. The Fed’s aggressive purchasing of Mortgage Backed Securities is the ONLY activity driving rates to these incredible lows. There is a deadline to the Fed’s spending spree and it is approaching fast. When the Fed stops buying mortgage backed securities at the end of first quarter 2010, all of this artificial demand will end. Rates WILL increase.

2009-10-20T09:17:00.000-07:00

Mortgage rates are improved today as mortgage bonds trade higher helped by Treasuries rallying off of tame inflation and worse than expected housing start data. However, mortgage bond gains have moderated from earlier highs this morning as the Dow tries to stay above the 10,000 mark. The “day trading” approach to bonds continues as technicals still rule over fundamentals.

MBS: +20bps
Dow: -77.99 --- 10,014.20
Oil: -1.41 --- $78.20

2009-10-19T09:56:00.000-07:00

Mortgage rates are mixed today as mortgage bonds struggle to hold onto Friday’s gains. Mortgages were helped earlier as Treasuries did a brief turnaround this morning after the New York Fed said it’s testing of its reverse purchase agreements tool does not signal it is moving toward monetary tightening. With little economic data and much Fed speak, traders are tuning in to hear of any direction regarding monetary policy. However be careful today: bonds are showing signs of weakness at the moment while the Dow is up and has again crested the 10,000 mark as the bulls are having their way…

MBS: +4bps
Dow: +100.06 --- 10,095.97
Oil: +0.10 --- $78.63

2009-10-16T10:27:00.000-07:00

Mortgage rates are slightly improved as mortgage bonds trade into positive territory alongside treasuries as stocks retreat from the 10,000 mark. The Dow is down over 100-points at the moment. Mortgage bonds were trading down earlier this morning but have improved as stocks have declined following worse than expected consumer sentiment data which trumped positive industrial production figures. Traders are choosing “squishy” data over hard numbers this morning…maybe it’s Friday or maybe the too far too fast rise in stocks is prompting investors to second guess valuations. It is Friday and be careful as mortgages have been a bit volatile lately.

MBS: +12bps
Dow: -64.84 ---9,998.10
Oil: -0.06 ---$77.52

2009-10-15T13:03:00.001-07:00

Mid day reprice for the worse as mortgage backed securities continue their decline.

MBS: -32bps

2009-10-15T09:29:00.000-07:00

Mortgage rates are worse again today as mortgage bonds continue to follow Treasuries south in light of mostly positive economic data (see headlines). Although both Treasuries and mortgages attempted to reverse the morning’s losses they have failed to sustain as bonds and stocks trade off each other. Positive earnings reports and bull market sentiment propelled the Dow above the 10,000 mark yesterday and is attempting to hold and build on it this morning. So far the bulls have been winning but many bears believe a pull back is eminent as investors realize better than expected earnings cannot be sustained. Careful today: mortgages appear more volatile and a bit unhinged from Treasuries this morning.

MBS: -14bps
Dow: -12.47 --- 10,003.39
Oil: +1.87 --- $77.06

2009-10-14T10:58:00.000-07:00

Mortgage rates are worse today as mortgage bonds follow treasuries into negative territory reversing yesterday’s gains. Better than expected retail sales and positive earnings from JP Morgan Chase has the stock markets touching intraday highs. At the moment bonds are improving as the stock markets recedes from the morning’s highs. Global confidence is up, inflation is tamer than expected and business inventories fell at a record pace setting us up for rebound in orders.

MBS: -10bps
Dow: +125.23 --- 9,996.29
Oil: +0.78 --- $74.93

2009-10-13T12:42:00.000-07:00

Mortgage rates are flat on the day. The stock markets are lower today as financials and disappointing earnings reports from key stocks. This week is light on data with the most important reports due tomorrow and Thursday on inflation indicators Fed minutes.

MBS: -3bps
Dow: -16.78 -- 9,869.02
Oil: +0.88 -- $74.25

2009-10-12T09:15:00.001-07:00

Mortgage rates are worse today as the bond market is closed after a brutal day of losses on Friday. Both mortgages and Treasuries were pummeled pushing rates higher as investor selling skimmed the profits off of the recent market rally. Stocks markets are positive today as the Dow creeps back near the 10,000 mark. The bears are still wondering where the value is as the real economy doesn’t appear to support stock prices.

2009-10-07T09:46:00.000-07:00

Most rates are level to slightly better today as mortgage bonds attempt to regain some losses from Tuesday. Treasuries have reversed course today as the entire yield curve is now in positive territory, but mortgages are not benefiting much. The good news is yesterday they were not hurt that much either as the Fed has been successful in keeping rates in a low and relatively stable trading range. Stocks are tentative this morning giving a lift to bonds as investors await earnings reports to see if the recent stock gains will be validated by results. We have another debt auction today as $20 Billion of 10 Year Notes is on the block, results around 10am.

MBS: +12bps
Dow: -36.58 --- 9,694.67
Oil: -1.57 --- $69.31

2009-10-06T10:38:00.001-07:00

Most rates worsened today as mortgage bonds lose some ground, weighed down by Treasuries pressured ahead of today’s $39 Billion 3-Yr Note auction. Further pressuring bonds are positive stocks (the Dow is up over 140-points) buoyed by anticipation of an improved earnings season and by Australia’s central bank raising its key cash rate, suggesting the worst danger for its economy had passed (in contrast to the U.S., they have positive inflation) Other than auction results around 10am the only other scheduled data is ABC consumer confidence later this morning.

MBS: -9bps
Dow: +129.83 --- 9,729.58
Oil: +0.72 --- $71.13

Alliance Capital Group - Mortgage NEWS

Mortgage rates held steady today

Mortgage rates held steady

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Mortgage rates are slightly improved

Mortgage rates are slightly worse today

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Mortgage rates near unchanged to slightly worse

Mortgage rates improved today

Mortgage rates are higher today

Mortgage rates improved today

Mortgage rates improved today

Mortgage rates worsened today

Mortgage rates are slightly worse

Mortgage rates near unchanged

Mortgage rates near unchanged

Mortgage rates are level to worse

Mortgage rates improved again today

Mortgage rates improved today

Mortgage rates worsened today

Mortgage rates improved slightly today

Mortgage rates improved today

Mortgage rates significantly worse again today

Mortgage rates worsened today

Mortgage rates improved today

Mortgage rates improved today

Mortgage rates are level to slightly improved

Mortgage rates worsened today

Mortgage rates improved today

Most mortgage rates are level today

Most mortgage rates worsened today

Most mortgage rates improved today

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