Daily Commentary by Larry Baer: Different day - same story.
This week's Treasury Department sale of $99 billion worth of 2-, 5- and 7-year notes will likely exert the greatest influence on the short-term trend trajectory of mortgage interest rates. Treasury will kick things off with the sale of $35 billion of 2-year notes today followed by $35 billion of 5-year notes tomorrow and they will wrap-up their borrowing spree with the sale of $29 billion of 7-year notes on Thursday. If these three auctions draw decent demand - (an improved likelihood after yesterday's comments from Fed Chairman Bernanke reinforced the notion the Fed intends to leave their benchmark interest rates at super-low levels into 2014) -- mortgage investors will likely breathe a sigh of relief and push mortgage interest rates fractionally lower. In the off-chance Uncle Sam is forced to "sweeten-the-pot" by dropping his price in order to attract the required capital - it is almost certain mortgage investors will respond by pushing their rates higher as well. Each of these auctions will conclude at 1:00 p.m. ET and I will post results on the website as soon as possible thereafter.
FYI - The S&P/Case-Shiller composite index of single family home prices was unchanged on a seasonally adjusted basis in January. It was the first time the index did not decline since July 2011 when prices were flat on a month-over-basis. Details contained within the index indicate average home prices across the country have now retreated back to early 2003 levels.
THE MARKET IS ALWAYS RIGHT! . YOU AND I ARE SOME OF THE TIME
