Danny Salas

Archive for October 5th, 2009

Chico, CA Interest Rates Market Report – Economic Influences – October 4, 2009

MBS Are Testing May's Highs, AGAIN.

Breaking The Barrier

It will prove difficult to break through May’s Highs regarding Mortgage-Backed Securities.  We’re playing with those highs this morning, however, investor’s will be watching and may “cash in” on their opportunity. 

Treasury Auctions

Last week, we mentioned that the Fed was announcing their Auctions for this week.  These auctions can really move markets, particularly when the announcement of the Government Sponsored Purchase Program will be ending in the first quarter of 2010.  Today, $7 Billion of 10-Year Treasuries will be auctioned.  This is a pretty long term, in which to receive a return on your investment, so it will be interesting to see how this auction fares. 

Stock Market Ready For A Correction

A highly recognized and respected economist, known as, “Dr. Doom,” Nouriel Roubini, indicated, over the weekend, that The Stock Market has corrected itself too quickly and too much.  I agree with this.  That is why I have been stating for quite some time that I thought rates would move back into the fours.  However, keep in mind that with the announcement of the Government Sponsored Purchase Program coming to an end, rates will be fighting for which direction to take.  Eventually, higher rates will win, when the bond market has an empty coffer in which to choose investors from. 

Alan Greenspan Talks

Former Fed Chairman Alan Greenspan spoke this weekend.  He indicated that unemployment would top 10%, but warned against another government bailout program, as it would be detrimental to inflation and other economic problems, in the long run. 

Float Into The Day

But, once again, a trigger finger on the lock button, as we’re toying with May Highs and the 10-Year Treasury Auction, both of which could be major players in moving rates higher. 

Related Must Reads

End Of The Day Rates
Why Be Leary…An Explanation Of Longer Term vs. Higher Risk In MBS Investments
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