More Volatility Coming From Europe

European Fix

The European Central Bank (ECU) and The International Monetary Fund (IMF) announced that they will be lending 750 Billion Euro ($955 Billion) to European Countries to help stabilize the Euro and restore confidence in European countries’ debts.  They have also agreed to start purchasing the debt, as well as government Bonds, of struggling countries like Spain, Portugal, Ireland, and you guessed it…Greece.

Eerily Similar To US

This strategy sounds awfully familiar to the United States Troubled Asset Relief Program (TARP), and $1.25 Trillion Mortgage-Backed Security Purchase Program.  Seems as though these tactics have, so far, worked for the United States, and therefore, Europe is interested in their temporary relief benefits, as well.  What is alarming is that these programs can be quite inflation causing, when the government unloads this massive debt in the future.  That’s all anyone needs, is hyper-inflation, all over the world…

Treasury Auctions

Tomorrow, the Treasury will start it’s auction of $38 Billion in 3-Year Treasury Notes, followed by Wednesday’s $24 Billion in 10-Year Notes, and finally Thursday’s auction of $16 Billion in 30-Year Treasury Notes.

Europe's Influx of Cash

Locking Advice

Careful Floating, as the Stock Market and Bond Market determine what the IMF and ECB’s influx of funds will do to these markets

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Continued Volatility Will Push People To Want To Lock

Fighting For Investors

There are no real economic factors to report today, so Bonds will move in the opposite direction of Stocks while each fight for investors’ attention.  I think Stocks will win, however, later in the week, and into May, expect Stocks to lose and Bonds to rise, lowering interest rates…but only expect that if you have any trust in what I have to say…just puttin’ it out there.  I feel Stocks are primmed for a reversal.  As earnings reports continue to roll out, this and next week, I don’t think the Dow can remain over 11,100.

Watching England

The United Kingdom (UK) Reported a Consumer Price Inflation rise of 3.4%, last month.  The government mandates inflation to read at or below the 2.0% level, similarly to the United States.  England is suffering from a horrible recession, and therefore their government is not prepared to raise their interest rates, to combat inflation.  However, eventually, they will be pressured to do so…and the longer they wait…the harder the inflationary pressures and results will be; pushing rates higher…resulting in a competition with the United States…as the United States will have to raise their rates, to be competitive in a world market.

Treasury Auctions

Tomorrow, the United States’ Government will announce the value of the auctions set forth for Monday through Thursday of next week.  The results of that auction might surprise people, as they have TIPS on Monday, and 2, 5, & 7-Year Treasury Note Auctions on each consecutive day.

Can You Stomach The Ride?

Locking Advice

If you can stomach the ride…and try and be patient…I’d float into the next couple of weeks and see if the Stock Market moves lower, benefiting dollars for Mortgage-Backed Securities and lower rates.

Related Must Reads

Why Be Leery…A Look Into Short Term / Long Term Treasuries

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Volatility Is Back!

Whatta Week!

There is a lot occurring this week.  Wednesday ends the Fed $1.25 Trillion Government Mortgage-Backed Security Purchase Program.  Once that program ends, expect rates to climb a little.  We expect about .25% in rate, as we have already moved approximately .25% higher after last weeks taste of market nervousness, after a not-so-good auction of Treasuries.  Thursday will provide us with the new Jobless Claims Numbers.  This week, the Fed will announce next weeks auctions of 10-Year TIPS, as well as 3, 10, & 30-Year Treasury Note Auctions.  There are FINALLY investors, sitting on the sidelines, waiting to purchase these securities, however, without the U.S. Government purchasing some of them, we’ll have to see where the returns will have to be (yields), in order to capture investors’ attention.  Which translates to higher interest rates!  Finally, we’ll see the Jobs Report Number on Friday.  Due to market volatility, temporary hiring of census bureau workers, and weather across the country, getting better…these jobs numbers could be hot, so if you’re not locking…better have an itchy lock finger.

Inflation Vacation

The Fed’s Favorite Gauge on Inflation, the Core Personal Consumption Expenditure Index (PCE), came in at a tame 0.0%.  This left the year-over-year PCE at 1.3%.  The Fed desires to keep inflation between 1.0 and 2.0%.

Good Friday

With this Friday, being Good Friday, Stocks and Bond Traders will have a small window, in order to cash in, or buy their investments.  When this occurs, it creates shifts in the market that can’t handle the volume.  So, like a hose that gets smaller and smaller, pressure builds and rushes prices to next levels exponentially.  So, Friday’s gonna be a potential mover of markets.

Carefully Float Into The Day

Floating Advice

Careful floating (and I mean careful), could be the theme of the morning.  However, as mentioned earlier…you’d better have a finger on the lock button…volatility is the name of this game.

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The Big Room At Sierra Nevada Brewing Company

YOU DON’T WANT TO MISS THIS EVENT!!!

Scott St. John will be speaking at The Big Room At Sierra NevadaThe , Friday, March 26, 2010.  Scott is a 3rd-Term Governing Board Member of Freddie Mac.  You’ll have an opportunity to inquire into expected economic future of the United States, Real Estate and its REO future, and what’s happening behind the scenes that is making closing loans to more timely and difficult, these days.   REGISTER AT THE CHICO OR PARADISE BOARD OFFICES.  $10 includes appetizers.  $15.00 AT THE DOOR!

Rates Are Still Smokin'

Happy Spring!

Spring is in the air, and that what mortgage-backed securities have managed to do, this morning; spring off the 50-Day Moving Average and remain, so far, just above the 25-Day and 40-Day Moving Averages.  This has managed to help interest rates move slightly down.

$1.25 Trillion

So, over the course of the next two weeks, there are only $14 Billion left in the arsenal of funds that the Fed had set aside to purchase Mortgage-Backed Securities.  Also, this week, alone, the Fed is auctioning $44 Billion of 2-Year Notes, $42 Billion of 5-Year Notes, and $32 Billion of 7-Year Notes, to help pay for the ever expanding deficit.

A Difference of Opinion

Some say that rates will spike severely, after the Fed’s $1.25 Trillion is used up.  Others say it will not have too much of an effect, as there is an adequate amount of cash, on the sidelines, to sort of, pick up the pieces.  I believe that the average rate will be effected by approximately .25% in rate.  Without a major buyer, in the market, I feel like there has to be a negative result.

Short For Time Periods...May As Well Lock

Locking Advice

Again, I advise that if you’re looking at a long escrow, take advantage of the fact that you don’t have to lock.  If you’re in a shorter one…than now is about as good as it gets!

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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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Rates Holding Firm With Poor Economic Data

Economic Reports SHOULD Cool Rates…But…

The Fed’s Favorite Gauge on Inflation, The Core Personal Consumption Expenditure Index (PCE) came in at a year-over-year reading of a calm, cool, 1.4%.  Estimates were set for a 1.5% reading, and remember, inflation is interest rates worst enemy.  The PCE, for the month of November, came in at 0.0%.  Now that’s cool!  Personal Spending was down to a 0.5% reading, when experts expected a 0.7% figure.  Personal Income increased, but at 0.4%, when they expected a 0.5% increase.  Personal Savings remained at a steady 4.7%.  So, what all this points to is that people are making less, spending less, and saving more.  All signs of a cool economy and generally this information would significantly benefit interest rates, however, other things are brewing, in the background.

Treasury Auction Announcement Pausing Markets

The Next Treasury Auction Announcement is due for release today.  Here’s the concern:  With a HUGE auction announcement expected, and people all around the world taking time for the holidays, making it another short week, next week, the auction is expected to disappoint.  So, the speculation is that there will not be much interest for the Treasuries, and therefore, rates will need to be increased to lure interest.  With this instability, if you don’t lock, and watch the market, you’re risking another downward trend.  I might count my blessings and just protect myself, during these nervous moments.

After 6 Days Of Higher Rates...We're Finally Floating Again

Rates Getting Better

Finally, after six straight days of increased interest rates, mortgage-backed securities are finally making a move in the other direction, to the benefit of rates. 

Treasury Auction

With no real economic information to influence markets this week, interest rates will likely follow technical factors and results of the Treasury Department’s Auctions, throughout the week.  Tomorrow, $40 Billion in 3-Year Notes will be auctioned.  Wednesday will auction off $21 Billion in 10-Year Notes and Thursday will see $13 Billion in 30-Year Notes. 

Ben Bernanke

Ben Bernanke is speaking at the Economic Club of Washington today.  His statements may be alarming, following Friday’s Jobs and Unemployment Surprises.  There is talk that the Fed may increase the overnight rate sooner than most thought.  This is causing the Dollar to gain value at the cost of stocks, gold, and oil. 

Locking Advice

After the change in trading this morning, we should float into the day and see what happens with the first Treasury Auction tomorrow.

Related Must Reads

Why Be Leery…
December 4th’s Unemployment Surprise
Title of article

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Rates Are Too Low NOT To Lock

No News Day

There are no economic reports to discuss today.  No news means that bonds will likely take the opposite direction of Stocks.  It’s the third consecutive day that Stocks are falling, so Bonds should fall…therefore have higher yields, therefore higher rates.  But it’s a close call, as Bonds have remained at high levels, giving us excellent interest rates this past week.  I would lock, however, as it doesn’t get any better than this.

To See Rates

Just click on the blog and go about half-way down the page, on the left hand side, as you’ll see the US Average Rates…24/7!

Recond Treasury Note Auction

Next week, we’ll see a Record Auction of Treasuries…AGAIN!  I’ll report on this, probably Tuesday!  I’m off to Austin, Texas for the weekend to see a friend get married!  Have an excellent weekend and if you don’t hear from me Monday…you will on Tuesday!

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Connect With Us On Facebook ]]> http://accessloans.net/2009/11/20/chico-ca-interest-rates-market-report-economic-influences-november-20-2009/feed/ 0 http://accessloans.net/2009/11/16/chico-ca-interest-rates-market-report-economic-influences-november-16-2009/ http://accessloans.net/2009/11/16/chico-ca-interest-rates-market-report-economic-influences-november-16-2009/#comments Mon, 16 Nov 2009 17:02:56 +0000 Daniel C. Salas http://accessloans.net/?p=1235

Currently Lower Rates, But CAREFULLY Watch This Market

Retail Sales

October Retail Sales came in at 1.4%, compared to 0.9% that was anticipated.  When you take out auto sales, the number, actually, came in at 0.2%, lower than the 0.4% expected.  Not only that, but September’s numbers were revised from a negative 1.5% reading to a dismal -2.3% reading.  These numbers are alarming because Retail Sales Taxes help give states, and the country, money to operate their government.  With lower Sales, there are lower Sales Tax Income Opportunities for governments.  Further hurting the deficits. 

Ben Bernanke Speaks Today

He’ll be talking with the Economic Club in Manhattan.  Any time Bernanke speaks it can move interest rates.  Wonder if he’ll comment regarding when and what the Fed plans on doing to hold off inflation, while trying to deal with interest rates remaing low to help with the economy.  He’s got to have the funnest job in the world, these days. 

Alarming Statement

Kansas City Fed President Thomas Hoenig said this, this weekend, “We still have significant weakness to work through in the economy, in the U.S., and coupled with a rapidly rising level or debt and enormous moral hazard issues, we have a great deal of work ahead of us.”  Statements like this, are kind of what I have been talking about.  The media continues to paint a rosy picture of our economy, and I just don’t see it.  I guess statements like this are what people need to hear, to start thinking twice about pulling out of this financial situation that we’re in, as a country. 

No Auctions This Week

However, there will be an annoucement of what next week’s Treausry Auction amounts will be. 

Related Must Reads

Rates Move on Speculation
The Real Jobs Numbers
Treasury Auction Funds Are Drying Up

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Rates Are About As Low As They Can Get

Happy Friday the 13th!

Bonds are actually trading at a signicant level.  They’re currently at the high’s of October and May.  So, another opportune time to take advantage of the market!

Consumer Sentiment

Consumer Sentiment was reported at 66, lower than the 71 mark that economists were looking for.  I’ve been writing about how the media has been hyping up the employment numbers as good signs of a recovery, however, it looks as though most consumers are taking a similar opinion as mine.

$1 Trillion Auctioned So Far

About $14 Billion in Treasuries were auctioned off this week.  Compared to past months of about $25 Billion is auctions, you can see that the number is dwindling.  As this number declines, rates will eventually move up!

Next Week…

That’s about it on the interest rate front this morning.  Next week is loaded with economic data, so pay close attention!  Have an excellent weekend!

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