San Diego Home Mortgage Blog

Given the weaker open and morning pricing at the lowest of the day, we will hold rate locks for now; At 4:30 we will decide whether to hold them or fold them.

Treasuries and mortgages were lower early, prior to 8:30 data. At 8:00 the 10 yr was -1/32 and mortgages unchanged. At 8:30 data flowed; August PPI up 2.7% with the core (ex food and energy) +0.2%----both were higher than expectations. August retail sales were a lot stronger than we or the markets were expecting; up 2.7% overall and when autos are extracted a strong 1.1%. We were expecting retail sales ex autos at +0.4%.

The N Y Empire State manufacturing index was also better; at 18.8, from 12.08 in August; markets were looking for 15.0 on the overall. New orders were up t0 19.84 frm 13.43 in August and employment did dip a little, to -8.3 frm -7.45. Any reading over zero is considered expansion.

The initial reaction to the three reports wasn't good for the bond and mortgage markets; at 8:40 the 10 yr note -11/32 to 3.46% +4 BP; mortgage prices were down 6/32.

Time 12:30 edt:

Treasuries and mortgage markets opened weaker this morning and fell further in price on the 8:30 economic data. The NY Empire State manufacturing index, the surprising increase in August retail sales sent the 10 yr note to 3.49% and mortgages about 10:30 were off 11/32. There was little reaction or interest in the jump in August PPI; stronger than expected but markets are not concerned that inflation is a worry point yet.

Stock markets started strong on the data but so far have spent most of the session hanging around unchanged.

PRICES @ 12:30 PM

10 yr note: 101.18 -4/32 3.44% +2 BP

5 yr note: 99.30 -2/32 2.38% +2 BP

2 Yr note: 100.04 -1/32 0.93% +1 BP

30 yr bond: 104.09 -7/32 4.25% +1 BP

Libor Rates: 1 mo 0.242%; 3 mo 0.293%; 6 mo 0.675%; 1 yr 1.260%

30 yr FNMA 4.5 Nov: 100.01 -3/32 (-8/32 frm 10:00 yesterday)

15 yr FNMA 4.0 Nov: 100.16 -3/32 (-8/32 frm 10:00 yesterday)

30 yr GNMA 4.5 Nov: 100.07 -3/32 (-8/32 frm 10:00 yesterday)

15 yr GNMA 4.0 Nov: 101.05 -3/32 (-7/32 frm 10:00 yesterday)

DJIA: 9636.02 +9.22

NASDAQ: 2096.79 +5.01

S&P 500: 1049.26 -0.08