Daily Commentary by Larry Baer: Mortgage investors are taking a "wait-and-see" approach in front of today's $21 billion 10-year Treasury note auction. Nagging worries about Europe in the wake of a warning about the survivability of the euro from major debt rating agency Fitch and data showing a rather sharp contraction in Germany's fourth-quarter economic performance will almost certainly assure today's dollar denominated debt sale goes well. As a matter of fact, should the yield on today's 10-year note offering fall below 1.948 (a reasonable possibility), it will be a new record all-time low for this debt instrument. Mortgage investors have largely already priced this expectation into their rate sheets so don't look for the current level of mortgage interest rates to change much if the yield on the Treasury's 10-year note does indeed fall far enough to make it into the record books. I will post the auction results on my website as soon as possible once the final gavel falls at 1:00 p.m. ET.
The December Retail Sales figures scheduled for release at 8:30 a.m. ET on Thursday will be the only notable macro-economic report on tap for this week. Mortgage investors have already priced-in expectations for a decent but not outstanding December for retailers. Given the actual numbers closely approximate the current consensus estimate from economists calling for a 0.2% headline gain for December retail sales - look for little if any directional influence to be exerted on mortgage rates as a result of this report.
THE MARKET IS ALWAYS RIGHT! . YOU AND I ARE SOME OF THE TIME
