Last week we had a very limited amount of economic news, so bonds were pushed around by the auction results. When the yield on the 10-yr hit 4%, it seems to have attracted investors, so we “bounced”. Overall the auctions were okay; although there is continued nervousness about whether or not the US will see others support our deficit. Regardless, mortgage rates actually ended the week on a decent note – certainly no disaster has occurred since the Fed stopped buying MBS’s – and are following Treasury rates. Money managers, insurance companies, and pension funds are buyers of mortgages, and although there are weekly volume fluctuations, most indicators still point to a slower year in 2010 than 2009. And if production (supply) is down, and demand steady…

This week we have a little more substantive economic news, including Wednesday’s Consumer Price Index (CPI), Retail Sales report, and Beige Book. Tomorrow we’ll see some trade balance figures. Industrial Production & Capacity Utilization and the Philly Fed survey are announced on Thursday (after Initial Jobless Claims come out). Housing Starts (“New Residential Construction”) are on for Friday. Inflation certainly appears under control and the March CPI is expected to be +.3% with the core rate only up .1% (which the Fed likes). And March’s Retail Sales figure is expected to be +1.8%, probably due to strong auto sales. Ahead of all that, the 10-yr is at 3.88% and mortgage prices are better by about .125.

 

On today’s date: April 12…

1945: Harry Truman sworn in as 33rd president

1945: U.S. liberates Buchenwald concentration camp            

1844: Texas became a U.S. territory                    

 

The last word:

“Be nice to nerds. Chances are you’ll end up working for one.” – Bill Gates

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