Bill Nickerson's Mortgage News: February 2013

Monday, February 25, 2013

Mortgages Rate for today

This week, February 25^th 2103;

On Friday as it appears now the $85B in automatic spending cuts will go into effect. A lot of talk and slings and arrows between the two political parties has not led to any effort to avoid the cuts. Does it really matter? Given the movements in US and global stock markets, it doesn’t look like investors care much. The global equity markets continue to improve and US interest rate markets have seen little change over the last three weeks. Global markets believe that in the next week or so there will be a deal worked out that will rectify the automatic cuts. The 10 yr note and MBSs have seen very little change in the last few weeks; the 10 yr note yield trading in a 10 basis point yield range and MBSs in about a 6 bp range on the rates.

Treasury will begin auctioning $99B of notes Monday with $35b of 2 year notes, Tuesday $35B of 5 yr notes and Wednesday $29B of 7 year notes. The economic calendar has a number of key data points; nothing on Monday, Tuesday Jan new home sales, Wednesday Feb consumer confidence and Jan pending home sales, Thursday the 2nd look at Q4 GDP that is expected to be revised higher to +0.5% from -0.1% on the advance report, Friday the Feb ISM manufacturing index. Those are the main points this week. Along with them personal income and spending for Jan and weekly jobless claims.

The bond market and mortgage market continue with a slight bearish outlook; most all of our models remain bearish, however the strength of the bear has lessened over the last week. The 10 yr has very solid resistance at 2.05%; until the note can decline under 1.95% the outlook remains neutral at best. A close over 2.05% on the 10 will trigger more selling and a run up of about 10 more basis points in the rate.

What does this mean? Treasury Markets are trying to push through the ceiling of 2.05% and if and when they do, we will see mortgage rates rise. With this Friday approaching and the Government finishing up its last minute Fiscal Cliff items, the mortgage rate markets should remain flat this week.

Have a Wonderful Day!

Bill Nickerson

Vice President Mortgage Network Inc

179 Great Road, Acton MA 01720

bill@billnickerson.com

978.273.3227

Posted via email from Bill's Mortgage News

Monday, February 18, 2013

Mortgage Rates Going Up?

February 18, 2013: This week; January housing data; starts and permits and existing home sales all a little softer than Dec data. Likely in part due to the realization the SS payroll tax increase hit although December data was quite good in itself. January inflation data with PPI and CPI, both are well within the Fed’s range so not likely to see much reaction. Thursday the Feb Philadelphia Fed business index is expected to show improvement, and it is Feb data that will draw attention. Wednesday at 2:00 the minutes from the 1/31 FOMC meeting will be released; recall when the Dec minutes were released there was talk within the group that the Fed was beginning to discuss possible plans on how to unwind the QEs when the time comes (certainly not likely anytime soon). The minutes will get a lot of attention and debate within markets.

The 10 year note yield is still hugging 2.00% levels while the US stock indexes are presently marking time with not much change last week. Talk still exists that the indexes may run to new all-time highs before any anticipated correction that even the most bullish are expecting. Interest rates are unlikely to decline unless equity markets slip and there is a momentary change in the bullish sentiment that presently dominates the stock market.

What does all this mean? Mortgage rates have inched up a little over the last several weeks as the markets are supporting the recovery. Unless we see some declining economic numbers in the coming days or the stock markets go through a minor correction, we will see mortgage rates test new highs in the coming weeks.