Danny Salas

Archive for January 26th, 2010

Chico, CA Interest Rates Market Report – Economic Influences – January 26, 2010

Japan's Woes Are America's Gains

Japan’s FICO…Below 620?

Seems as though the world is concerned with Japan’s credit rating and investors are dumping their Japanese Bonds and moving to the safe-haven of US Bonds and Mortgage-Backed Securities.  This is currently helping interest rates.  Standard and Poor’s warned that Japan’s rating would move to negative.  How did Japan get there?  By creating huge stimulus programs and spending programs to try and help stimulate the economy.  This has created massive debt, for them, and they’ll have to re-pay this debt at high interest rates.  Uh…sound familiar? 

China’s Tightening Credit

So China is tightening their capital reserve requirements, making it more difficult to obtain credit.  This is alarming because China is a HUGE purchaser of US exports, and if their credit standards restrict companies from buying our exports, it could hurt the US economy even more. 

$44 Billion in 2-Year Notes

That’s right. 2-Year Treasury Notes are being auctioned today.  If the auction fares well, with a lot of foreign appetite, we could see rates move slightly lower.  With the problems in Japan, we might see a healthy auction all week.  We will see 2-Year, 5-Year, and 7-Year Note Auctions this week.  With the shorter terms, we may see more of an appetite for these investments. 

Consumer Confidence

Well, this reading came in higher than expected.  This reading kinda cracks me up, because who’s setting that level of where the consumer should be confident or not?  I think we have a long way to go, but I guess that things are looking a little better. 

Locking Advice

With the Fed Meeting coming to fruition tomorrow and the Treasury Auctions occurring this week, we’d better have a finger on that lock button.  But it’s safe to float, into the day.  We may see a lot of volatility this week.  So, buckle up! 

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