Mortgage Rates


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




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Tuesday, March 01, 2011


Treasuries and mortgage markets opened weaker this morning; the 10 yr note at 9:00 -15/32 at 3.48% +6 bp and mortgage prices -7/32 (.22 bp) in price. Oil climbed as much as 1.0% after authorities in Iran, the second-largest producer in OPEC, arrested opposition leaders to derail demonstrations scheduled for today. Fighting in Libya may have shut as much as 850,000 barrels a day of output, according to the International Energy Agency. Opposition supporters are planning to hold a demonstration today after leaders Mehdi Karrubi and Mir-Hossein Mousavi were transferred to a Tehran prison, according to the opposition Kaleme website. Protests from Morocco to Bahrain have already toppled leaders in Tunisia and Egypt and protests have erupted in Yemen, to the south of Saudi Arabia, the world’s biggest oil producer. In Oman, the largest Middle Eastern producer outside OPEC, hundreds of demonstrators gathered in Sohar for a third night yesterday, demanding the government open talks on their demands for more jobs, higher pay and more representative political institutions.

Even with tensions increasing overnight in the Mideast, the bond market isn't biting on safety moves this morning. Today the talk is centered on inflation. It just won't go away even though in the US inflation is not a factor now, nor is it likely to be in the near future. In emerging markets however, inflation is spreading quickly leading increased debate that inflation will sooner rather than later filter into the US. Even as Europe struggles with a sovereign debt crisis, inflation in the 17-nation euro region quickened to 2.3% in January, the fastest since October 2008, according to data published by the European Union’s statistics office yesterday. (Bloomberg). An ECB governing council member said on Feb. 26 that inflation pressures are forcing policy makers to focus more closely on the timing of future interest-rate increases.

Fed chief Ben Bernanke is about to begin testimony at the Senate Banking Committee, the semi-annual required appearance to report on monetary policy and the economy. Tomorrow he will go the the House for the same requirement. His prepared remarks usually don't get much attention, it is the Q&A for a few hours that we focus on. In his opening prepared text Bernanke is upbeat on the economy, looking for growth this year at 3.5% to 4.0%.

Two reports at 10:00. Jan construction spending expected to have declined 0.6%, as reported spending was down 0.7%; private construction off 1.2% while public spending +0.1%. The Feb ISM manufacturing index, expected at 60.5 frm 60.8 in Jan increased to 61.4; new orders index increased to 68.0 frm 67.8 the highest index reading on new orders since Jan 2004, the employment component increased to 64.5 frm 61.7 and the prices pd moved a little higher to 82.0 frm 81.5.

The Johnson Redbook same-store sales increased last week, 3.0% yr/yr compared to +2.7% the previous week. Month-to-month a 1.6% gain vs January in what is an indication of major strength for the ex-auto ex-gas category of the government's retail sales report. Redbook reports full price strength for spring apparel and strength in private labels. Chain stores will post individual results for February on Thursday. Earlier this morning, the ICSC-Goldman same store sales reported a year-on-year dip of 0.5% in the February 26 week as high gas prices siphoned off same-store sales at retailers. The year-on-year rate, reflecting a calendar shift for Presidents' Day, rose three tenths in the week to plus 3.3%. The report continues to see a respectable plus 2.5 to 3.0% month-to-month rise for February vs January.