Daily Commentary by Larry Baer: Most mortgage investors have already put the
finishing touches on their risk management positions as time ticks down to
today's early market close at 2:00 p.m. ET.
The Treasury
Department will wrap-up this week's three-part debt auction when the final
gavel falls on $29 billion of 7-year notes at 11:30 a.m. ET today.
Today's offering is broadly expected to draw a mediocre bid. If so, this
event will likely have little noticeable impact on the current trend of
mortgage interest rates.
Earlier this morning
the Labor Department reported the number of Americans standing in line to file
for first-time government unemployment benefits rose by an unexpected 16,000 to
a seasonally adjusted 357,000. Jobless claims have risen for the past two
weeks, but given their volatility, it is too soon to conclude the job market is
showing signs of deteriorating. Mortgage investors yawned.
In a separate report
the Commerce Department said their final "guesstimate" of the pace of
economic growth during the fourth-quarter of 2012 improved by 0.4% over
third-quarter levels. The growth rate was the slowest since the
first-quarter of 2011 and far from what is needed to fuel a faster drop in the
unemployment rate. It was, however, higher than the government's previous
estimate of a 0.1% growth rate. Much of the weakness came from a slowdown
in inventory accumulation and a sharp drop in military spending -- factors that
had already been anticipated. The data had no material affect on the
direction of mortgage interest rates today.
Looking ahead to
next week -- Monday's March Institute of Supply Management report will be the
highlight of a slow start to the week - but things will really heat up on
Friday with the release of the March Nonfarm Payroll figures. The
consensus forecast among economists is currently projecting the nation's
employers added 197,000 new jobs during the month of March while the national
jobless rate held steady at 7.7%. If the actual numbers match or closely
approximate the forecast - mortgage interest rates will not likely move
much. In the unlikely event the headline number shows a gain of 205,000
jobs or more -- and/or the national jobless rate drops to 7.6% or less --
expect mortgage interest rates to move notably higher before the end of the
day.
THE
MARKET IS ALWAYS RIGHT! . YOU AND I ARE SOME OF THE TIME
