At 9:30 the DJIA opened +56, NASDAQ +21, S&P +7. The 10 yr note yield at 2.05% -2 bps; 30 yr FNMA 3.5 coupon +11 bps frm yesterday’s close and +8 bps frm 9:30 yesterday.
Should be another quiet day today; so far this week not much movement in the bond and mortgage markets. Not much data, the ECB tomorrow and the FOMC next week keeping markets stable.
This morning the only news today; weekly mortgage applications from the MBA; apps increased 11.8% overall, purchase apps +16%, re-finance apps +9%. Mortgage applications swinging wildly the last three weeks on new disclosure rules. The week before this apps declined 27.6%, purchases -34%, re-finances -23%. The week prior to that; apps +25.5%, purchases +27%, re-finance apps +24%. Hard to draw any conclusions frm mortgage applications over the past three weeks.
MBA reported yesterday that the association expects $905B in purchase applications next year; up 10% frm this year. Re-finances according to MBA down by 30% frm this year to $415B. On net, mortgage originations will decrease to $1.32 trillion in 2016 from $1.45 trillion in 2015. For 2017, MBA is forecasting purchase originations of $978 billion and refinance originations of $331 billion for a total of $1.31 trillion.
The Atlanta Fed GDPNow out yesterday; GDP growth (seasonally adjusted annual rate) in the third quarter of 2015 is 0.9% on October 20, unchanged from October 14.
Yesterday the 10 yr note yield rose to test its 20 day average and it held; this morning a little better at 2.04% -3 bps. 2.00% remains a rock solid resistance while the upside should not move above 2.15%. Still holding minor bullish bias but unlikely to move much until next week’s FOMC meeting; even then to drive rates lower for mortgages and treasuries it will take additional weakness in Europe, in Asia and emerging markets. Zero interest rates frm the Fed continue to drive investors to equities even as Q3 growth is expected to decline to less than 1.0% growth.