San Diego Home Mortgage Blog

We suggest floating locks to start; the data this morning hasn't hurt the rate markets so far. The 10 yr and mortgages are sitting on technical support levels. If you do float keep alert to our Rate Alerts; not willing to force the situation here.

Prior to 8:30 this morning the stock indexes and interest rate markets were generally unchanged.

Yesterday treasury rates increased at the middle and short end of the curve, the 5 yr note yield increased 5 basis points to 2.45% and the 2 yr note was up 6 BPs to 0.99%; the 10 yr +2 BP to 3.48% while the 30 yr bond was unchanged. At 9:30 the DJIA opened unchanged; the 10 yr note +5/32 at 3.46% and mortgages were +3/32 on the day (see below for 10:10 levels)

At 8:30 weekly jobless claims were reported -12K to 545k, markets had thought there would be an increase in claims; continuing claims, a more significant number, did increase to 6.23 mil frm an upward revision last week frm 6.088 mil to 6.101 mil.

Also at 8:30 August housing starts, expected to have increased 3.2% were +1.5% to 598K. building permits were expected have declined 4.0% but were up 2.7%. It was mostly multi-family that were up in starts; single-family projects dropped 3.0%, the first decrease since January, while work began on 25% more multifamily units.

At 10:00, a few minutes ago, the Sept Philly Fed business index was reported, expected to increase to a read of 8, it jumped to 14.1; new orders declined to 3.3 frm 4.2, prices pd increased to 14.9 frm 10.0, and employment declined to -14.3 frm -12.9 in August. The headline was very strong but the interior guts were generally a little weaker. The initial reaction wasn't much; the 10 yr +3/32 at 10:04 and the DJIA +36.

Rounding out the information today, at 11:00 Treasury will announce the amounts of next week's 2 yr, 5 yr and 7 yr auctions. Last month it totaled $109B and should be close to that this time around. So far the demand for treasuries has been generally solid with investors taking down the supply on strong demand.

Bloomberg ran a survey on consumer spending and it does not look that good for the next six months based on the results. Consumers plan to refrain from boosting their spending even after the biggest drop in consumption since 1980, signaling concern about the direction of the economy over the next six months. Only 8.0% of U.S. adults plan to increase household spending, almost one-third will spend less, and 58% expect to “stay the course”. More than 3 in 4 said they reduced spending in the past year.

PRICES @ 10:10 AM

10 yr note: 101.12 +5/32 3.46% -2 BP

5 yr note: 99.22 +1/32 2.44% -1 BP

2 Yr note: 99.31 -1/32 1.01% +1 BP

30 yr bond: 104.13 +16/32 4.24% -3 BP

Libor Rates: 1 mo 0.246%; 3 mo 0.291%; 6 mo 0.679%; 1 yr 1.291%

30 yr FNMA 4.5 Nov: 100.04 +3/32 (unch frm 10;00 yesterday)

15 yr FNMA 4.0 Nov: 100.20 +3/32 (+2/32 frm 10:00 yesterday)

30 yr GNMA 4.5 Nov: 100.09 -2/21 (-3/32 frm 10:00 yesterday)

15 yr GNMA 4.0 Nov: 101.09 +1/32 (+1/32 frm 10:00 yesterday)

Dollar/Yen: 91.40 +0.51

Dollar/Euro: $1.4716 +$0.0012

Gold Dec: $1,017.30 -$2.90

Crude Oil Oct: $72.48 -$0.03

Goldman-Sachs

Commodity Index: 472.97 -0.03

DJIA: 9835.46 +43.75

NASDAQ: 2139.93 +6.78

S&P 500: 1073.04 +4.28