Market commentary

If you did not lock your loan last week disappointment will greet you this morning as interest rates are again creeping higher. The yield on the 10 year note has risen to 3.675% and prices on mortgages are .20% to .30% worse from the close on Friday.

Economic data this week is sparse; however, the U.S. Treasury will auction $32 billion of 3 year notes Tuesday, $24 billion of 10 year notes Wednesday and $16 billion of 30 year bonds on Thursday. This leads me to an article from Bloomberg which reported “more than 40% of the Treasuries purchased by the Fed in January’s QE2 operations were new issues (issued in the past 90 days). That percentage is up from 20% in December and 15% in November. The Fed has displaced other large buyers such as China and primary dealers as the largest buyer of Treasuries for the time being. With supply weighing on the market this week, it is a good thing the Fed is there to amplify demand”.