Treasury released the 2009 fiscal data on Friday; the annual deficit is less than what had been expected. The deficit for the year $1.417T, estimates a few months ago were in the range of $1.8T. Treasury said the lower deficit is due to unused TARP funds that were expected to be much higher. Good news anytime the deficit is less than expectations, but very worrisome with the deficit four times higher in 2009 than 2006 and likely to be over a trillion in 2010. Treasury also reported foreign buyers increased their U.S. debt holdings for a fourth consecutive month in August to $3.45T. No let up in demand for treasuries based on concerns the economic recovery will falter, the dollar weaker attracting foreign demand and thoughts the Fed will not tighten until at least mid-2010. Mostly guesses on the economic outlook and the timing of any Fed squeeze. Fixed income funds have attracted 18 times more money than the equity market so far this year.
Rate markets opened lower in price this morning, but holding at 9:00 at support levels. The 10 yr note at 8:00 was off 8/32, by 9:00 the note -2/32 and mortgage prices -2/32. The stock market trade in early futures trading pointing to a better open at 9:30. At 9:30 the DJIA opened +15, the 10 yr note -3/32 and mortgage prices at 9:30 -3/32.
Mortgage markets were a little lower at 10:00, but still slightly better than where prices traded at 9:30 Friday morning. Technically, mortgage charts are bearish with the 9 day relative strength index at oversold levels. Looking for a bounce, but it will require the 10 yr note to lead the way. The 10 yr has nice support at 3.50% and solid resistance now at 3.25%. The remainder of the day will be stock watching for bond traders.
Q3 earnings reports continue to flood in; most are better on cutting costs and employees. No end to the job losses, even though 500K a week hitting unemployment is seen as good news. The equity markets look a little tired; they have looked tired many times in the last few months, only to rest up and shoot higher.
Market Minute information for October 19, 2009 provided by:
 Patsy Bailey Mortgage Banker |
 4801 Lang Ave NE Suite 100 Albuquerque, NM 87109 4001 Office Court Ste 603 Sante Fe, NM 87507 Cell: 505.715.3231 Office: 505.473.4045 ext.109 E-mail: patsybailey13@gmail.com |
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