Danny Salas

Archive for December 10th, 2009

Chico, CA Interest Rates Market Report – Economic Influences – December 10, 2009

Rates Moving With Employment Numbers

Auctions Not Doing Well

Yesterday saw rates nervously move up and down, as investors waited for the results of the 10-Year Treasury Auction before committing to where to move their funds.  In the end, it wasn’t a rosy picture for Mortgage-Backed Securities (MBS) and the day ended in negative territory.  This morning is shaping out to be the same story, with MBS in negative territory and we’ve moved below the 25-Day Moving Average.  The next layer of support is about 20 points lower than we currently are…the 50-Day Moving Average.  With the 30-Year Treasury Auction occurring today…I’m nervous as well. 

Jobless Claims Higher Than Expected

Initial Jobless Claims came in at 474,000, however 455,000 losses were expected.  Normally, this would be good for interest rates, however, since the Continuing Claims fell to 5.16 Million, and that being the lowest Continuing Claims numbers since February, the market actually took that as a positive, as opposed to a negative…and therefore, rates are reacting negatively.  Careful to assess, though.  Keep in mind that this time of year there are numerous part-time or temporary positions that are filled, somewhat skewing these figures. 

30 Day Prognostication

Over the course of the next thirty days, expect the market to be very choppy.  Let’s give one example.  These Unemployment Numbers, reported Friday, were healthier than expected.  Today’s claims were higher than expected, but averaging the last four weeks together shows increases in employment.  Don’t be surprised that if, after the holidays, these numbers start to dissapate, somewhat.  This information will lead to a bumpy ride, probably into the second quarter of 2010.  So, you’ll have ups and downs, and when you have a slight dip, you’ll have advantages on when to lock.  Working with a banker that understands these rides is imperative to happy buyers.  Make sure your banker is prepared, or if you’d like to work with my office, I am available always, and have some of the lowest rates in the Western United States. 

Locking

May as well ride out the day and see if we’ll have to lock, if MBS move below the 50-Day Average.  Since we opened 22 Points below yesterday’s close, and only have 20 points to go to the 50-Day Moving Average…let’s be nervous together…

 Related Must Reads

Bonds, Moving Averages, And Trends Lines
$1.25 Trillion Question: Where Will Rates Go AFTER March of 2010?

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