Treasuries and mortgages opened a little weaker this morning with stock indexes a little better. Not unusual after a State of the Union speech, markets generally come away with increased optimism even though it was all fluff as most S of U speeches. At 8:00 the 10 yr -6/32; at 8:30 weekly jobless claims were slightly higher than expected. Claims expected to have declined 28K fell just 8K to 470K; last week’s claims were revised better, to 478K frm 482K. Continuing claims were 4.602 mil, down from a revised 4.659 the previous week (revised from 4.599 mil); continuing claims continue to rise as unemployment shows little signs of improving. Jobs are still being lost, just not at the pace of a year ago. Dec durable goods orders were also out at 8:30; orders were expected to be up 2.0% but were up 0.3%; excluding transportation orders up 0.9%. Yr/yr durable goods orders are down 20%.
At 9:30 the DJIA opened +20, 10 yr at 9:30 -6/32 3.68% +2 BP and mortgage prices -5/32 (.15 bp).
Yesterday the FOMC statement sent rate markets lower in price and boosted equity markets. For the first time the Fed came real close to confirming the recession is over. The Fed will end most of the liquidity and stimulus programs by the end of Feb and end the purchases of MBSs at the end of March. The Fed will have completed its $1.25T commitment to by MBSs from Fannie and Freddie. The Fed apparently more at ease with the sustainability of the recovery and is laying the ground work for ending all support to the financial system. The statement did however remains the same in regard to increasing the FF rate, saying it would continue to keep rates low for an “extended period” of time. For the first time one FOMC member, KC Fed Pres Hoenig, didn’t go along with that “extended period”, he wanted it removed from the released statement saying the economic recovery is moving well and it wasn’t needed.
At 1:00 this afternoon Treasury will complete its $118B borrowing with $32B of 7 yr notes. The 2 yr and 5 yr auctions went well; the 2 yr had a slightly higher rate but good bidding, the 5 yr was strong yesterday. Traders are expecting another good auction on the 7 yr. Treasury borrowing will take a two week break before coming back to the well with 3s, 10s and 30s on Feb 9, 10 and 11.
The rest of the day today, as is the case recently, will be focused on the equity markets. The stock indexes were trading better early this morning, pushing prices of treasuries and mortgages lower. At 9:30 the DJIA opened better but within 10 minutes went negative. the 10 yr and mortgages recovered from their lows but are still weaker. A lot of day left; if stocks fall and the 7 yr note does well mortgage prices should do better. That said; technically the 10 yr and mortgages continue to fail at their respective resistance levels; 3.60% on the 10 yr note
and 101.3/32 (100.09 bp) on the FNMA 4.5 Feb coupon. At 10:00 the 10 yr 3.67% and the mortgage price 100.23/32 (100.63 bp).
Market Minute information for January 28th, 2010 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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