Commentary: Uncle Sam will be in the credit markets again today looking to peddle $21 billion worth of 10-year notes. This will be the second of three Treasury auctions scheduled for the week - and like the others - today's event will conclude at 1:00 p.m. ET. I'll post the auction results on my website as quickly as possible once the final gavel falls.
Yesterday news that Japan will show support for the financially hard hit euro zone by promising to buy bonds from the region together with a report that a Portuguese bond sale held earlier today drew better-than-expected demand has probably eliminated a significant amount of foreign "flight-to-quality" buying that would have otherwise found its way into today's U.S. Treasury note auction.
A poorly bid auction this afternoon will almost certainly induce mortgage investors to push note rates higher. Heads up.
It is Wednesday which means the Mortgage Bankers of America have released their loan application statistics for the latest week. According to the MBA overall loan demand was up 2.2% during the week ended January 7th. A 4.9% increase in refinance requests more than offset a 3.7% decline in purchase money demand. On a national basis refinance requests currently represent 7 out of 10 of all loans in process. The national contract rate for a fixed-rate 30-year mortgage finished the week at 4.78%, down 4 basis points from the prior week, down 6 basis points from four weeks ago, and down 35 basis points from the year ago level.
THE MARKET IS ALWAYS RIGHT! . YOU AND I ARE SOME OF THE TIME
