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Wednesday, November 2, 2011
Mortgage Rates
Anthony Hood
Equity Investment Capital
Office: 949-891-0067
Email: tony@equityinvestmentcapital.com
website: www.equityinvestmentcapital.com
Building Strong, Lasting Relationships; One Client at a Time.
Wednesday, November 02, 2011
Treasuries and mortgages after three days of improvement are weaker this morning, volatility in US markets continues to be excessive; most of it is what isn't happening in Europe. Europe pushing on a string, there isn't enough capital in the region to come close to keeping the sovereign debt under control, there is going to be failures beginning with Greece. Greece in the EU is on borrowed time, in the end Greece will likely default and exit the EU. Next up n the line of problems, Italy and Spain. For all the summit meetings and all the press conferences there has been no real effective solution. Europe's banks can't take 50% haircuts on the bonds they hold from a number of EU countries, the IMF isn't likely to get too deep into the problem without bringing massive criticism from G-20 countries. China last week indicated it may be interested in EU debt but only if the bonds its purchases have a valid Guarantee from the EFSF and that hasn't happen. In the meantime what happens in Europe is unsettling all of the industrial world, sending mixed messages daily that produces wild and unexpected moves as was clearly evident yesterday and Monday.
Europe’s bailout fund is delaying a 3 billion-euro ($4.1 billion) bond sale after Greek Prime Minister George Papandreou’s request for a referendum on the rescue pact for his country roiled markets. An EFSF official said in a conference call with investors today that it may wait for the outcome of the Nov. 3-4 Group of 20 summit in Cannes, France before selling the bonds, according to a person with knowledge of the matter. On Friday there will be a confidence vote in the Greece Parliament, if he doesn't retain his majority he may be out of office by Saturday morning.
This morning at 8:15 the ADP October non-farm payrolls increased 110K a little better than estimates, Sept jobs were revised higher 25K more than reported last month to +116K. Treasuries and mortgages, already weaker didn't show any reaction to the better jobs. The stock indexes after falling 576 points yesterday and Monday on the DJIA are better this morning but not much.
At 12:30 this afternoon the FOMC policy statement will be released, likely markets will be relatively quiet until then. At 2:15 even more important than the policy statement, Bernanke will hold a press conference. What is Bernanke thinking about what isn't happening in Europe? Will he signal the possibility of more easing with a QE 3? Operation Twist didn't work, why? A lot of questions.
The driver for mortgage interest rates, the 10 yr treasury note, even after the strong improvement in the past couple of days, is still unable to hold under 2.00%. Every time the 10 falls below 2.00% it hasn't lasted more than a few days.
At 9:30 the DJIA opened +90, the 10 yr note -19/32 2.06% +6 bp and mortgage prices -8/32 (.25 bp).
Purchase applications for home mortgages rose for a second week, up 1.8% in the October 28 week on top of the 6.4% gain in the October 21 week to nearly reverse the prior week's 8.8% drop. The refinance index is down 0.2% in the latest week. Rates in the week were little changed with 30-year conforming loans ($417,500 or less) down two basis points to 4.31% and 30-year jumbo loans (greater than $417,500) up one basis point to 4.69%.
At 10:00 the bond and mortgage markets have come off their lows; mtgs -3/32 (.09 bp).
Anthony Hood
Equity Investment Capital
Office: 949-891-0067
Email: tony@equityinvestmentcapital.com
website: www.equityinvestmentcapital.com
Building Strong, Lasting Relationships; One Client at a Time.
Wednesday, November 02, 2011
Treasuries and mortgages after three days of improvement are weaker this morning, volatility in US markets continues to be excessive; most of it is what isn't happening in Europe. Europe pushing on a string, there isn't enough capital in the region to come close to keeping the sovereign debt under control, there is going to be failures beginning with Greece. Greece in the EU is on borrowed time, in the end Greece will likely default and exit the EU. Next up n the line of problems, Italy and Spain. For all the summit meetings and all the press conferences there has been no real effective solution. Europe's banks can't take 50% haircuts on the bonds they hold from a number of EU countries, the IMF isn't likely to get too deep into the problem without bringing massive criticism from G-20 countries. China last week indicated it may be interested in EU debt but only if the bonds its purchases have a valid Guarantee from the EFSF and that hasn't happen. In the meantime what happens in Europe is unsettling all of the industrial world, sending mixed messages daily that produces wild and unexpected moves as was clearly evident yesterday and Monday.
Europe’s bailout fund is delaying a 3 billion-euro ($4.1 billion) bond sale after Greek Prime Minister George Papandreou’s request for a referendum on the rescue pact for his country roiled markets. An EFSF official said in a conference call with investors today that it may wait for the outcome of the Nov. 3-4 Group of 20 summit in Cannes, France before selling the bonds, according to a person with knowledge of the matter. On Friday there will be a confidence vote in the Greece Parliament, if he doesn't retain his majority he may be out of office by Saturday morning.
This morning at 8:15 the ADP October non-farm payrolls increased 110K a little better than estimates, Sept jobs were revised higher 25K more than reported last month to +116K. Treasuries and mortgages, already weaker didn't show any reaction to the better jobs. The stock indexes after falling 576 points yesterday and Monday on the DJIA are better this morning but not much.
At 12:30 this afternoon the FOMC policy statement will be released, likely markets will be relatively quiet until then. At 2:15 even more important than the policy statement, Bernanke will hold a press conference. What is Bernanke thinking about what isn't happening in Europe? Will he signal the possibility of more easing with a QE 3? Operation Twist didn't work, why? A lot of questions.
The driver for mortgage interest rates, the 10 yr treasury note, even after the strong improvement in the past couple of days, is still unable to hold under 2.00%. Every time the 10 falls below 2.00% it hasn't lasted more than a few days.
At 9:30 the DJIA opened +90, the 10 yr note -19/32 2.06% +6 bp and mortgage prices -8/32 (.25 bp).
Purchase applications for home mortgages rose for a second week, up 1.8% in the October 28 week on top of the 6.4% gain in the October 21 week to nearly reverse the prior week's 8.8% drop. The refinance index is down 0.2% in the latest week. Rates in the week were little changed with 30-year conforming loans ($417,500 or less) down two basis points to 4.31% and 30-year jumbo loans (greater than $417,500) up one basis point to 4.69%.
At 10:00 the bond and mortgage markets have come off their lows; mtgs -3/32 (.09 bp).
Tuesday, November 1, 2011
Mortgage Rates Today
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.
Tuesday, November 01, 2011
The wheels started coming off yesterday on what was lauded as a big step forward in Europe to get a grip on Greece and other EU countries that are similarly facing potential defaults on their sovereign debt; this morning the wheels have fallen off completely-----at least at the moment. What is happening today is no assurance the same will be the case tomorrow based on the last two years out of the region. A huge shocker to financial markets in Europe and here in the US; in a surprising move no one saw coming, Greek Prime Minister announced he would not continue to fight the issues in the country and let citizens decide whether or not to go along with the austerity programs set out by EU officials. He is calling for a voter referendum and let citizens decide whether they want austerity or default that will eventually end Greece's membership in the EU. Greece’s proposed referendum poses a threat to the region’s financial stability, Fitch Ratings said. Group of 20 leaders gather Nov. 3-4 for a summit in Cannes, France, to discuss the debt crisis. No one saw this coming; letting voters decide, but the voting isn't likely until early next year.
Yesterday there were signs that the "plan" worked out last week was not as solid as what had been the wide belief last week. Yesterday re-started a run into safety in US treasuries, this morning its a stampede after the Greek news. At 9:00 the 10 yr note was at 1.97% down another 15 basis points from yesterday and down 44 basis points from last Thursday's high that sent rates up on the optimism of a Europe plan that was seen as a huge step forward. Mortgage rates tumbling with the 10 and the rest of the yield curve. Technically, last week the treasury and mortgage markets were breaking supports, most all of our models had become bearish. Not the case now, the 10 yield is well below its key 20 and 40 day averages, the RSI is now in bullish territory.
MF Global filed for bankruptcy yesterday, the NY Fed revoked its primary dealer status, overnight there has been talk that custodial funds (money in accounts of customers) possibly $100 mil that is not accounted for. Another minor motivation for money to migrate to treasuries.
The DJIA opened -250, NASDAQ -68, S&P -32; at 9:30 the 10 yr note at 2.00% and mortgage prices +15/32 (.47 bp). Most all Euro equity markets trading down 5% to 6% on the Greek referendum decision.
At 10:00 Oct ISM manufacturing index, expected at 52.1 frm 51.6 in Sept, fell to 50.8. The headline not do good, but components held up; new orders at 52.4 frm 49.6, prices pd at 41.0 from 56.0 and employment at 53.5 frm 53.8. No reaction to the report.
Also at 10:00 Sept construction spending was thought to be up 0.3%, as reported up 0.2%, in Aug construction spending revised from _1.4% to +1.6%.
Today the FOMC meeting gets underway; we won't have anything to look to until tomorrow at its end, at 12:30 tomorrow the policy statement will be released then at 2:15 Bernanke will hold his press conference. The economic outlook, what the Fed may be thinking and the Euro issues will dominate.
Mortgage rates now back to some of the best levels, volatility is back with a vengeance and will continue to be the case with markets swinging in big moves. The Fed is in play on what it may do, if anything, to keep rates from increasing, the stock market is going to track how Europe's markets perform, and the US economic outlook remains cloudy. Expect markets to swing in wide ranges. Suggest taking advantage of the current decline in 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.
Tuesday, November 01, 2011
The wheels started coming off yesterday on what was lauded as a big step forward in Europe to get a grip on Greece and other EU countries that are similarly facing potential defaults on their sovereign debt; this morning the wheels have fallen off completely-----at least at the moment. What is happening today is no assurance the same will be the case tomorrow based on the last two years out of the region. A huge shocker to financial markets in Europe and here in the US; in a surprising move no one saw coming, Greek Prime Minister announced he would not continue to fight the issues in the country and let citizens decide whether or not to go along with the austerity programs set out by EU officials. He is calling for a voter referendum and let citizens decide whether they want austerity or default that will eventually end Greece's membership in the EU. Greece’s proposed referendum poses a threat to the region’s financial stability, Fitch Ratings said. Group of 20 leaders gather Nov. 3-4 for a summit in Cannes, France, to discuss the debt crisis. No one saw this coming; letting voters decide, but the voting isn't likely until early next year.
Yesterday there were signs that the "plan" worked out last week was not as solid as what had been the wide belief last week. Yesterday re-started a run into safety in US treasuries, this morning its a stampede after the Greek news. At 9:00 the 10 yr note was at 1.97% down another 15 basis points from yesterday and down 44 basis points from last Thursday's high that sent rates up on the optimism of a Europe plan that was seen as a huge step forward. Mortgage rates tumbling with the 10 and the rest of the yield curve. Technically, last week the treasury and mortgage markets were breaking supports, most all of our models had become bearish. Not the case now, the 10 yield is well below its key 20 and 40 day averages, the RSI is now in bullish territory.
MF Global filed for bankruptcy yesterday, the NY Fed revoked its primary dealer status, overnight there has been talk that custodial funds (money in accounts of customers) possibly $100 mil that is not accounted for. Another minor motivation for money to migrate to treasuries.
The DJIA opened -250, NASDAQ -68, S&P -32; at 9:30 the 10 yr note at 2.00% and mortgage prices +15/32 (.47 bp). Most all Euro equity markets trading down 5% to 6% on the Greek referendum decision.
At 10:00 Oct ISM manufacturing index, expected at 52.1 frm 51.6 in Sept, fell to 50.8. The headline not do good, but components held up; new orders at 52.4 frm 49.6, prices pd at 41.0 from 56.0 and employment at 53.5 frm 53.8. No reaction to the report.
Also at 10:00 Sept construction spending was thought to be up 0.3%, as reported up 0.2%, in Aug construction spending revised from _1.4% to +1.6%.
Today the FOMC meeting gets underway; we won't have anything to look to until tomorrow at its end, at 12:30 tomorrow the policy statement will be released then at 2:15 Bernanke will hold his press conference. The economic outlook, what the Fed may be thinking and the Euro issues will dominate.
Mortgage rates now back to some of the best levels, volatility is back with a vengeance and will continue to be the case with markets swinging in big moves. The Fed is in play on what it may do, if anything, to keep rates from increasing, the stock market is going to track how Europe's markets perform, and the US economic outlook remains cloudy. Expect markets to swing in wide ranges. Suggest taking advantage of the current decline in mortgage rates.
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