Mortgage Rates




Anthony Hood
Equity Investment Capital
Office: 949-891-0067
Email: tony@equityinvestmentcapital.com
website: www.equityinvestmentcapital.com



Building Strong, Lasting Relationships; One Client at a Time.

Thursday, July 14, 2011


Prior to three data points at 8:30 the 10 yr note -7/32 and mortgage prices -3/32 (.09 bp). Stock indexes were better indicating a better open at 9:30.

At 8:30 weekly jobless claims were expected at 405K; as released claims did decline to 405K down 22K frm last week. Continuing claims at 3.727 mil frm 3.712 mil. June retail sales were up 0.1%, excluding auto sales unchanged for the month. June PPI -0.4%, excluding food and energy +0.3%; yr/yr PPI +7.0%, excluding food and energy yr/yr +2.4% (pushing the Fed’s target).

Moody’s is threatening to downgrade US debt; putting the US on rating review. Moody’s is saying it doesn’t matter whether or not the US pays the interest on its debt or cuts social security and other payments, in their view any missed payments if a debt deal isn’t agreed on will be considered a default by the US. Treasuries and the dollar weakened while U.S. debt insurance costs climbed to the highest level in more than a year. Moody’s did the same thing in 1995 when the US faced the same political battle. Also over night there were more debt downgrades for 5 Irish banks.

At 9:30 the DJIA opened +8, the 10 yr note -10/32 at 2.92% +4 bp.

At 10:00 May business inventories; +1.0%, final sales -0.1%. The inventory to sales ratio at 1.28 months from 1.27 months in April.

At 10:00 Ben Bernanke will go to the Senate for the 2nd day of semi-annual required testimony on monetary and economic policy. At the House yesterday he warned Congress not to do anything that would weaken the economy more. He of course chided then to get the debt ceiling increased. Bernanke told the House he is prepared to launch another easing move if the economy continues to weaken; buying more treasuries and possibly MBSs. I can’t see how driving rates even lower will increase employment or help the economy grow, interest levels are not an impediment to growth at these levels. Pres Obama said he may call for a meeting at Camp David over the weekend to hammer out a deal on the debt-spending battle.

At 1:00 Treasury will auction $13B of 30 yr bonds, re-opening the 30 yr issued in May. The 10 yr and 3 yr auctions met with decent demand.

I am still out on vacation; sorry about the brevity this morning.