Daily Commentary by Larry Baer: Demand for American manufactured goods designed
to last three-years or more surged 5.7% higher in February - driven entirely by
a major pick-up in aircraft orders. Excluding transportation, orders
slipped 0.5%, after January's gain of 2.9%. The slowdown in durable goods
orders was broadly anticipated - with most mortgage investors choosing to shrug
the whole thing off.
A separate report
from the Commerce Department this morning showed the pace of new home sales
declined 4.6% in February. The data is volatile, and February sales
reflect buyer decisions that occurred in late 2012 when concerns over the
growth trajectory of the economy were much higher than they are now. On a
three-month average, new home sales are still running at their fastest pace
since August 2009. Mortgage investors gave the data a passing glance -
before moving on to put the finishing touches on their pipeline risk management
strategies in front of this week's three-part, three-day government debt
sale.
$35 billion of
2-year notes will hit the auction block at 1:00 p.m. ET this afternoon,
followed by $35 billion of 5-year notes on Wednesday and the whole thing will
wrap-up with the sale of $29 billion of 7-year notes on Thursday.
That's a lot of supply falling into a holiday shortened trading
period. Until the three sales are completed -- mortgage interest rates
will likely have a very difficult time trying to move notably lower from
current levels.
THE
MARKET IS ALWAYS RIGHT! . YOU AND I ARE SOME OF THE TIME
