“Bond Market News and Perspective for Mortgage Professionals”

 

 

Wednesday, February 2, 2010 

ADP Employment report:  jobs increased by 187,000 in January after a revised 247,000 gain in December that was less than the original report of  297,000.   The median estimate called for  a gain 140,000 gain in January.   Friday’s BLS Non-Farm Payrolls report is forecast to show 140,000 jobs increase  in January, with the jobless rate at 9.5%.   

MBA Weekly Mortgage Applications Survey Market Composite Index increased 11.3%,  Refinance Index increased 11.7 %, and the Purchase Index increased 9.5%.   ”Applications increased this week relative to the holiday week,” said Michael Fratantoni, MBA’s Vice President of Research and Economics. “Looking over the past two weeks, purchase applications are flat, and refinance applications are down about five percent.”   The refinance share activity decreased to 69.3% and the ARM share increased to 5.5%.  The average 30-year rate increased to 4.81% from 4.80% and 5-year rate increased to 4.13% from 4.12%.   

Treasuries Advance as Egyptian Concern Reemerges, Fueling Demand for Haven, and are now down slightly.  UST price support comes on concern political turmoil in Egypt may worsen, fueling demand for safe assets, as well as Fed buying of  $1.5 billion to $2.5 billion of notes maturing between 2021 and 2027 today as part of QE2.  The 10-year UST yield is at 3.45 this morning and  has ranged between the 3.25% and 3.5% range  this year.   The US will sell $72 Billion UST’s at the quarterly refunding next week in the form of $32 billion in 3-year notes, $24 billion in 10-year notes and $16 billion in 30-year bonds.   

Can anything end this ‘Groundhog Day’ of a winter?  All this snow will affect commerce, the economy,  and will most likely cause volatility in economic indicators.  

U.S. Treasury Will Sell $72 Billion in Long-Term Securities This Quarter.  The U.S. Treasury Department today said it would keep its long-term borrowing at steady levels and warned that the federal debt limit could be reached as soon as April 5.

Fed Suspends Reg Z Rulemakings; MBA Praises Decision,  saying it “does not expect” to finalize three pending rulemakings under Regulation Z, which implements the Truth in Lending Act, prior to the transfer of authority for such rulemakings to the Consumer Financial Protection Bureau.