Mortgage Rates

Mortgage Rates Anthony Hood Equity Investment Capital Office: 949-891-0067 Email: tony@equityinvestmentcapital.com website: www.equityinvestmentcapital.com Building Strong, Lasting Relationships; One Client at a Time. Friday, August 31, 2012 Yesterday the stock indexes took a hit on light volume with the DJIA ending -107; this morning at 9:00 the DJIA futures were up 114 points. The 10 yr note yield at 9:00 up 2 basis points after declining 2 bp yesterday; mortgage prices were unchanged at 9:00. All Europe stock markets trading better. Prior to 10:00 when Bernanke is scheduled to deliver his long anticipated speech and whether the Fed is ready to ease again soon. It is a toss-up, some looking for an easing in Sept while some think later this year and others thinking there won’t be any more easing because the economic outlook is improving slowly. German 10-year bunds fell, pushing yields up the most in more than a week, amid speculation the U.S. will add further monetary stimulus to boost the world’s largest economy, damping demand for the safest assets. 10-year yields rose seven basis points, or 0.07 percentage point, to 1.40%; The rate has increased 11 basis points this month while US 10 yr note has declined in yield. The spread between German 10 yr bunds and US 10 yr is 24 basis points. The jobless rate in the economy of the 17 nations using the euro was 11.3% in July, the same as in June after that month’s figure was revised higher. That’s the highest since the data series started in 1995. Inflation accelerated to 2.6% in August from 2.4% in the prior month. European economic confidence dropped more than economists forecast to a three-year low in August and German unemployment increased for a fifth month, adding to signs the euro-area economy continued to shrink in the third quarter. The ECB continuing to work cobbling a deal to buy Spanish and Italian bonds to keep their interest rates low and help those two economies. Still a long way to go though; German resistance continues but appears to have soften a little; meanwhile the German courts are due to rule on the legality of sovereign bond purchases on Sept 12th. The ECB meets on Sept 6th. The next FOMC meeting begins on Sept 12th. Lots of action within 6 days! At 9:30 the DJIA opened +66, NASDAQ +22, S&P +8; the 10 yr note at 1.63% unchanged on the day while 30 yr MBS price -3 bp. 9:45 the Chicago purchasing mgrs. index, expected at 53.0 frm 53.7; as reported the index was right on at 53.0. 9:55 the U. of Michigan consumer sentiment index expected at 73.6 increased to 74.3. 10:00 July factory orders expected +2.0% declined 0.5%. Order declines for petroleum & coal sent non-durable goods down 2.0%. Orders for petroleum & coal fell 2.9% for their largest drop in nearly 3-1/2 years. Durables orders gained 1.3%. Three economic reports 15 minutes before Bernanke speaks; there was no trading on the data ahead of what he may say.