Mortgage Market Snapshot & Rate Lock Advice for Thursday 4-15-2010

Mortgage and Lending with Mortgage Alliance Group - San Diego, CA - NMLS#305667

Update: The MBS Market is currently positive, up 16bps.  Many lenders are re-pricing for the better.  My strategy would be to carefully wait for your lender to re-price and then lock as market conditions (as we saw yesterday) are very volatile and things could turn south quickly.

Here is today's Mortgage Market Snapshot from

Treasuries and mortgages were slightly better prior to 8:30 this morning but data at 8:30 pulled treasuries and mortgages back to unchanged. Weekly jobless claims were substantially higher than estimates which were for a decline of 20K filings, as reported claims increased 24K to 484K, the highest claims since Feb 20th. Almost immediately talk was that the claims were higher due to the Easter holidays;  a labor dept spokesman said the jump in claims is an "administrative issue and not an economic issue". There is precedent for volatility around holidays but in this case if Easter holidays were responsible for the last two weeks of claims increases claims would likely have fallen as people didn't file. New unemployment claims have increased 45K in the last three weeks, while estimates over that period were for claims to be down 50K. Continuing claims last week increased from 4.57 mil to 4.64 mil. The number of people who've used up their traditional benefits and are now collecting emergency and extended payments rose by 162,101 to 5.97 million in the week ended March 27, reported in today's data.

Also at 8:30 the Apr NY Empire State manufacturing index jumped to 31.86 from 22.86; the new orders component increased to 29.49 from 25.43, the employment component increased to 20.25 frm 12.35 last month. A stronger report than had been expected.

The two 8:30 data points presented a mixed picture; the employment situation weaker than expected while the Fed's NY Empire St report stronger. At 9:00 the 10 yr note traded -3/32 at 3.88% +2 BP, mortgage prices -1/32 (.03 bp) and the DJIA futures was -16 points.

Next up; at 9:15 March industrial production, forecast at +0.7%, was slightly disappointing at +0.1%; Feb was revised from +0.1% to +0.3%. Also at 9:15 March capacity utilization was expected to increase to 73.3%, it was on it at 73.2% frm an upward revision in Feb from 72.7% to 73.0%. The two reports had o immediate noticeable impact on rates and stock indexes.

Finally this morning at 10:00 the Apr Philadelphia Fed business index, and more impacting than the NY Empire data at 8:30. The estimates for the overall index was an increase to 20 from 18.9 in March. As reported the overall index increased to 20.2; new orders component 13.9 frm 9.3 in March, employment component at 7.3 frm 8.4 in March. Any index over zero is considered expansion. There was no immediate reaction to the report.

China's economic growth accelerated to the fastest pace in almost three years in the first quarter, highlighting overheating risks that may prompt the government to scrap the yuan's peg to the dollar. Gross domestic product rose 11.9% from a year earlier, the statistics bureau said at a briefing in Beijing today. That was more than the median 11.7% estimates.

Treasuries and mortgages continue to rotate in their respective new 20 basis point yield ranges. Economic releases this morning were a mixed picture; more unemployment claims, better NY Empire manufacturing and the Philly Fed data a wash. At 10:05 mortgage prices jumped to +2/32 (.06 bp) frm -2/32 (.06 bp) at 9:30.

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