No economic data this morning and the 10-year Treasury note trading at 3.325% after hitting 3.47% late Wednesday. It appears that traders are getting long Treasuries before the holiday weekend as a customary hedge.
The bond market will close early today and the HSOA lock desk will close at 12 noon, Pacific Time. Remember, the HSOA pricing specials expire today, so do not miss out!!
Friday, December 31, 2010
Wednesday, December 29, 2010
Maarket commentary
Bond prices are bouncing back today after Tuesday’s “stinker”, as Bill Gross of PIMCO put it, 5 year note auction that drove bond yields higher. This auction saw the weakest demand since June of this year, and we have $29 billion of 7 year notes being auctioned today.
Remember, trading desks are lightly staffed, volume is thin, and obtaining bids for MBS is interesting with bids coming back with wide spreads.
Remember, only two (2) more days to take advantage of the HSOA purchase special and 30 day lock special! Call your HSOA sales professional for details!!
Remember, trading desks are lightly staffed, volume is thin, and obtaining bids for MBS is interesting with bids coming back with wide spreads.
Remember, only two (2) more days to take advantage of the HSOA purchase special and 30 day lock special! Call your HSOA sales professional for details!!
Monday, December 27, 2010
Market commentary
Trading desks are typically thinly staffed the week between Christmas and New Year’s Day, and with the blizzard that hit the northeast this weekend, the staffing is even lighter. This will make trading that much more volatile with a short trading week and little economic data.
The news focus today was the People’s Bank of China hiking the one-year lending rate on Saturday by 25 bps to 5.81%. They also raised the one-year deposit rate by 25 bps to 2.75%. Chinese officials are trying to curb growth and inflation, especially considering their inflation measured 5.1% in November. In the U.S. an inflation number that high would send interest rates soaring.
Finally, the U.S. Treasury will auction $35 billion of 2 year notes today, $35 billion of 5 year notes Tuesday and $29 billion of 7 year notes on Wednesday.
The news focus today was the People’s Bank of China hiking the one-year lending rate on Saturday by 25 bps to 5.81%. They also raised the one-year deposit rate by 25 bps to 2.75%. Chinese officials are trying to curb growth and inflation, especially considering their inflation measured 5.1% in November. In the U.S. an inflation number that high would send interest rates soaring.
Finally, the U.S. Treasury will auction $35 billion of 2 year notes today, $35 billion of 5 year notes Tuesday and $29 billion of 7 year notes on Wednesday.
Thursday, December 23, 2010
Market commentary
The market had several economic data releases this morning, most of which indicate an economy beginning to reflect some growth, but at a tepid pace. The weekly initial jobless claims came in right on top of estimates at 420,000. Claims are showing signs of stability in the new range of 410 to 440, having come in within the range for seven consecutive weeks.
Durable goods orders dropped 1.3% in November, a larger drop than expected, however, ex-transportation, orders rose a healthy 2.4%. The main reason for the overall decline was the drop in aircraft orders as nondefense aircraft orders were down 53.1% for the month.
Moving on to consumers, personal income rose 0.3% in November while October’s report was revised down to 0.4%. However, with personal spending coming in at a 0.4% growth rate, the pace of spending has increased more than income, causing the savings rate to fall to 5.3%.
Finally, the Thomson Reuters/University of Michigan index of consumer sentiment rose to 74.5 from 71.6 in November, a move in the right direction. Keep in mind this index averaged 89 in the five years leading up to the recession that began December 2007.
One other topic that has not been in the headlines is the steadily increasing price of oil; trading at over $90/bbl this morning. Those of you in southern California, where I reside, have been paying north of $3/ gal for gasoline for the past few weeks. So, with that in mind, Six Gulf Arab nations voted Wednesday to pursue the creation of a regional central bank and single currency with Saudi Arabia, Kuwait, Qatar, and Bahrain. Now, at what point do U.S. citizens realize it is in their best interest to use U.S. oil versus sending billion of dollars a month to the above mentioned folks? Of course one cannot blame these folks for wanting their own currency bloc given the U.S. and European strategy of debasing the dollar and the euro.
Remember, the bond market closes early today, but the HSOA lock desk will be open normal hours, until 4:00 PM, PT.
Durable goods orders dropped 1.3% in November, a larger drop than expected, however, ex-transportation, orders rose a healthy 2.4%. The main reason for the overall decline was the drop in aircraft orders as nondefense aircraft orders were down 53.1% for the month.
Moving on to consumers, personal income rose 0.3% in November while October’s report was revised down to 0.4%. However, with personal spending coming in at a 0.4% growth rate, the pace of spending has increased more than income, causing the savings rate to fall to 5.3%.
Finally, the Thomson Reuters/University of Michigan index of consumer sentiment rose to 74.5 from 71.6 in November, a move in the right direction. Keep in mind this index averaged 89 in the five years leading up to the recession that began December 2007.
One other topic that has not been in the headlines is the steadily increasing price of oil; trading at over $90/bbl this morning. Those of you in southern California, where I reside, have been paying north of $3/ gal for gasoline for the past few weeks. So, with that in mind, Six Gulf Arab nations voted Wednesday to pursue the creation of a regional central bank and single currency with Saudi Arabia, Kuwait, Qatar, and Bahrain. Now, at what point do U.S. citizens realize it is in their best interest to use U.S. oil versus sending billion of dollars a month to the above mentioned folks? Of course one cannot blame these folks for wanting their own currency bloc given the U.S. and European strategy of debasing the dollar and the euro.
Remember, the bond market closes early today, but the HSOA lock desk will be open normal hours, until 4:00 PM, PT.
Wednesday, December 22, 2010
Market commentary
It should come as no surprise that the Mortgage Banker’s Association reported its weekly reading on mortgage applications dropped 18.6% for the week ending December 17th. Purchase applications dropped 2.5% while applications for refinances plunged 24.6%.
In conjunction with this, the National Assn. of Realtors reported existing home sales rose 5.6% in November with approximately 1/3 of these being distressed sales; foreclosure or short sale. For the year, existing home sales are down 27.9% as high unemployment and tight lending standards hamper the housing recovery.
The final revision of GDP for the 3rd quarter shows that the economy grew at a slower-than-expected pace of 2.6%, but still above the 2nd quarter’s growth rate of 2.5%. Personal consumption was believed to have increased from 2.8% in Q2 to 2.9% but actually slowed to 2.4%.
This data had little effect on the markets with stocks flat and bonds prices slightly lower. Be sure to check out the year-end pricing specials being offered by Home Savings! With the holiday season in full swing it is easy to procrastinate, so don’t miss out!
Tomorrow will be a short day for the bond market and both stock and bond markets will be closed Friday, December 24, 2010.
In conjunction with this, the National Assn. of Realtors reported existing home sales rose 5.6% in November with approximately 1/3 of these being distressed sales; foreclosure or short sale. For the year, existing home sales are down 27.9% as high unemployment and tight lending standards hamper the housing recovery.
The final revision of GDP for the 3rd quarter shows that the economy grew at a slower-than-expected pace of 2.6%, but still above the 2nd quarter’s growth rate of 2.5%. Personal consumption was believed to have increased from 2.8% in Q2 to 2.9% but actually slowed to 2.4%.
This data had little effect on the markets with stocks flat and bonds prices slightly lower. Be sure to check out the year-end pricing specials being offered by Home Savings! With the holiday season in full swing it is easy to procrastinate, so don’t miss out!
Tomorrow will be a short day for the bond market and both stock and bond markets will be closed Friday, December 24, 2010.
Tuesday, December 21, 2010
Market commentary
There are no major economic releases again this morning, as this week the data are bunched into Wednesday and Thursday. Monday, U.S. Treasuries benefited from tension between South and North Korea, as well as concerns regarding the European sovereign debt mess. While concerns remain about the possible ratings downgrade of countries such as Portugal and Spain, U.S. Treasuries are flat from Monday’s close.
Trading will be light as the Christmas holiday approaches so volatility could seep back into the market.
HSOA is offering year-end pricing incentives, so be sure you contact your HSOA sales professional for details. Do not miss out!!!
Trading will be light as the Christmas holiday approaches so volatility could seep back into the market.
HSOA is offering year-end pricing incentives, so be sure you contact your HSOA sales professional for details. Do not miss out!!!
Friday, December 17, 2010
Market commentary
Bonds rallied Thursday, finally, and we have seen 10-year trade back down to a 3.39% this morning, 17 bps lower than it traded yesterday morning. This rally is in spite of good economic data from the Conference Board as it reported its index of U.S. leading economic indicators increased in November by 1.1%, the most in eight months, a signal that the U.S. economic recovery will strengthen early next year.
The House passed the tax cut extension bill late yesterday with a surprising amount of support and a final vote tally of 277 to 148. The bill will now makes its way to the President’s desk for signature at which point we can rest assured our paychecks will not be cut by an increase in tax rates on January 1st.
Mortgage pricing has improved this morning by .375% to .50%, and I would consider this an excellent day to lock and take advantage of this brief rally.
The House passed the tax cut extension bill late yesterday with a surprising amount of support and a final vote tally of 277 to 148. The bill will now makes its way to the President’s desk for signature at which point we can rest assured our paychecks will not be cut by an increase in tax rates on January 1st.
Mortgage pricing has improved this morning by .375% to .50%, and I would consider this an excellent day to lock and take advantage of this brief rally.
Subscribe to:
Posts (Atom)