The Mortgage Update 8-29-2013

All bonds were weak yesterday without much reason other than normal ebbs and flows in the market. The situation in Syria continues to degrade and economic data was weaker than expected, it just didn’t move the market. Weaker than average trading volume and range trades ahead of the NFP next week mattered more, causing us to lose ground late in the day. Today GDP is released at 8:30 along with Jobless claims, we will see if these attracts any buyers to the our market.

The Mortgage Update 8/28/2013

Mortgage rates hit a two week low yesterday with industry best execution around 4.5%. What caused this rally? It wasn’t tapering, Ben Bernanke, or home land economic news. It could be the market is correcting after hitting a multi-year high or the geopolitical risk out of Syria could be causing a flight to safety. Instability causes investors to seek safe investments like U.S. Treasuries and MBS. Back here on the home front today Pending Home Sales will be released at 10 AM. However, for the first time in a long time all eyes will be overseas.

The Mortgage Update 8-27-2013

Yesterday, the MBS Market got a boost from weaker
than expected Durable Goods Report. MBS bond
prices were 3/8th higher than at Friday’s close.
Overnight, treasuries advance for the fourth day before
economists predict confidence among U.S. consumers
declined for a second month. At 9 AM the Case-Shiller
Home Prices Report is released. Trading levels
continue to be weak as the summer holiday draws
closer, if these trade levels continue it won’t take much
to cause a re-price. The final, potential market mover
today is Federal Reserve Bank of San Francisco
President John Williams and ECB Executive Board
Member Benoit Coeure are due to speak on monetary
policy today in Gothenburg, Sweden.

The Mortgage Update 8/23/2013

The market is relatively quiet this morning. We have New Home Sales data to be released at 10AM, which could have some impact on the way MBS prices trade. We cannot say it enough that the Federal Reserve is watching these data points very closely as they determine when to slow bond purchases. Because of this fact, investors also watch closely each and every important data release - and their trading habits reflect that.

Have a great weekend!

The Mortgage Update 8/22/2013

Rates inched high yesterday following the release of the Fed minutes. No new information was released from Ben & Co, claiming reduction of asset purchases will remain dependent on economic data that supports economic recovery. That means, the volatility surrounding every economic news release will remain until at least September. Chinese and euro-area manufacturing expanded in August reports showed, adding to the evidence of a global recovery. This could have also undermined the demand for government debt. It’s another Jobless Thursday, let’s see what direction this swings us this week.

The Mortgage Update 8/21/2013

We saw the market correct itself a bit yesterday, with pricing improving in the morning, and then holding relatively constant the rest of the day. Market participants will be closely watching the wires this afternoon as Fed minutes will be released. Indications of a September tapering of bond purchases could lead the market into a bit of a frenzy this afternoon.

The Mortgage Update 8-20-2013

Mortgage rates hit their highest point in more than two years yesterday as weak trading levels caused rates to rise. The market continues to take a defensive stance against the possibility of the Fed reducing asset purchases. Low trading volume, uncertainty about economic policy and speculation of the next Fed Chairman nominee all add to the uncertainty and add volatility to the bond market. Today is slow economic news day with the Chicago Fed Index out at 8:30 and the Redbook out at 8:55. Most investors are waiting for the FOMC minutes to be released tomorrow.

Economic Calendar week of 8-19-2013

This Week's Economic Releases

Tues

8:30 AM

Chicago Fed Activity Index

8:55 AM

Red Book

Wed

7:00 AM

MBA Purchase Applications

10:00 AM

Exsisting Home Sales

10:30 AM

EIA Petroleum Status Report

2:00 PM

FOMC Minutes

Thurs

8:30 AM

Jobless Claims

8:58 AM

PMI Manufacturing

9:45 AM

Bloomber Consumer Comfort Index

10:00 AM

Leading Indicators

Fri

10:00 AM

New Home Sales

The Mortgage Update 8-19-2013

Where did everyone go? Last Friday, weak trading levels caused a substantial increase in rates. This increased the industry best execution to 4.75%. Another round of slightly positive economic data failed to convince markets that the Fed would reconsider tapering bond purchases in September. This week FOMC minutes are due out on Wednesday, Jobless claims on Thursday, and we will close the week with New Home Sales on Friday. The chance for volatility is high this week with many key speakers and economic data due out, hold on it could be a bumpy ride.

The Mortgage Update 8-16-2013

Mortgage rates moved to their highest level in over a
month yesterday as economic data suggested the
economy is continuing to improve. Unless negative
economic news surfaces, economist predict the Fed
will announce their tapering plans on September 18th.
U.S. housing starts rebounded and consumer
confidence increased to a six-year high. Jobless claims
also declined yesterday to their lowest level in almost
six years. Consumer Sentiment and Housing Starts will
be released today.

Aug 15 2013

Mortgage rates remained unchanged yesterday regardless of economic data that was released. Today reports will show manufacturing in New York area expanded in August at the fastest pace in six months. Consumer prices rose 2 percent in July from the previous year; that is up from 1.8 percent in June. Finally, producer process rose 2.1 percent in July, slowing from 2.5 percent in June. Now the market begins to focus on the FOMC and their commitment to taper bond purchases…here we go again.

The Mortgage Update 8-14-2013

Velocity and volatility increased yesterday, it just wasn’t in our favor. Retail sales set the tone for the morning, beating economists’ forecasts suggesting the economy is recovering. European data added to the negative momentum overnight. Remember them? Reports show the euro region returned to growth last quarter. Today is light on significant economic data. St. Louis Fed President James Bullard, who backed the decision to continue bond buying, will speak in Kentucky today. Tomorrow is another Jobless Thursday, which has the opportunity to move the market.

The Mortgage Update 8-13-2013

Liquidity can lead to volatility and that is what we saw yesterday. Weak trading levels late in the day caused a re-price for the worse, erasing all morning gains. A case could be made that investors are being cautious before Retail Sales today. Economists forecast Retail Sales increased in July for the fourth straight month. This reignited the conversation surrounding the Federal Government tapering bond purchases.

The Mortgage Update 8-12-2013

Treasures declined over night ahead of the U.S. Retail Sales Report, which should show sales increased for a fourth consecutive month. This is yet another sign that the economy is improving. Producer prices rose 2.4 percent in July from the year before. This week is heavy on economic news tomorrow Retail Sales and Business Inventories will dominate the headlines, Thursday Consumer Price Index is on the schedule, and we will round off the week with Housing Starts and Consumer Sentiment.

The Mortgage Update 8-9-2013

Mortgage rates inched lower again yesterday, hitting their best levels since July. The day was quiet, with the Jobless Claims Report arriving in line with expectations. Overnight 10-year notes remained unchanged as investors continue to debate whether the U.S. economy is robust enough for the Fed to start tapering their bond purchases. Don’t let the light economic news fool you, today could be the most volatile day of the week. With no economic news or events, trade participation will most likely be light and it will take very little conviction to move the market. Next week economist predict reports will show inventories and retail sales rose, backing the claims case that stimulus reduction is still a possibility in 2013.

The Mortgage Update 8-8-2013

It was another not-at-all riveting day on the bond market yesterday. Today has the biggest potential to move the drifting market with Jobless Claims to be announced at 8:30. The U.S. is scheduled to sell $16 Billion of 30-year bonds today. Demand for Treasuries and MBS could be supported because economists forecast claims for jobless benefits increased, showing signs of weakness in the U.S. economy. Let’s all put our rally caps on…

The Mortgage Update 8-8-2013

It was another not-at-all riveting day on the bond market yesterday. Today has the biggest potential to move the drifting market with Jobless Claims to be announced at 8:30. The U.S. is scheduled to sell $16 Billion of 30-year bonds today. Demand for Treasuries and MBS could be supported because economists forecast claims for jobless benefits increased, showing signs of weakness in the U.S. economy. Let’s all put our rally caps on…

The Mortgage Update 8-7-2013

Remember when the market cared about the Trade Deficit? The once important report failed to move the needle yesterday. Overnight Treasuries advanced for the first time in three days as foreign investors seek safety. However, advances were tempered when German industrial output surged in June. Government auctions might move the market today if trade levels remain weak. Tomorrow is the major economic news day with Jobless Claims announced at 8:30.

The Mortgage Update 8-6-2013

The MBS market rallied a full point last week on the tails of the jobs report. Although a movement in our favor, the market merely returned to the previous days levels. The jobs number was just weak enough to cause investors to question in QE will end in September or December. More indecision will mean more volatility for us. This week is a very slow news week with the Non-Manufacturing Report due out today and Jobless Claims on Thursday.

Economic News for week of Aug 5 2013

Mon
10:00 AM
ISM Non-Mfg Index

Tues
8:30 AM
International Trade

Wed
10:30 AM
EIA Petroleum Status Report

Thurs
8:30 AM
Jobless Claims


HAVE A GREAT WEEK!!

The Mortgage Update 8-5-2013

The MBS market rallied a full point last week on the tails of the jobs report. Although a movement in our favor, the market merely returned to the previous days levels. The jobs number was just weak enough to cause investors to question in QE will end in September or December. More indecision will mean more volatility for us. This week is a very slow news week with the Non-Manufacturing Report due out today and Jobless Claims on Thursday.

The Mortgage Update 8-2-2013

Stronger than expected ISM manufacturing data started a sell off that continued until the closing bell. Several dealers put out revised NFP forecasts and big block trades with less than 20 minutes before the Treasury close. Today has the highest prospect for volatility of the week with the employment report due out. If the report underperforms we could see rates decrease, however if the numbers we could see investors running for the door. It could go either way today…

The Mortgage Update 8-1-2013

Thank you, Ben Bernanke. The market rallied after Ben reaffirmed that he might keep purchasing bonds, depending on economic data. This morning however, treasuries are down ahead of reports that should show manufacturing growth quickened while unemployment rates fell. Many investors are claiming the rally yesterday was excess and rates should adjust today. We will see if their forecasts are correct…