Posted To: MBS Commentary

While mostly overlooking a dense economic calendar last week, investors were forced to base their trading behavior on breaking news headlines and events. Mortgage rates benefited from a “flight to safety”, but it was a roller coaster ride. There were large spikes and big drops. An abundance of chaos if you will. Much of the storyline has yet to develop in Japan, Northern Africa, and the Middle East. Thus we’d expect breaking headline news to dictate the direction of mortgage rates this week too . Equity futures rose sharply overnight as Japanese emergency forces were able to restore power to nuclear plants, prompting the Prime Minister to speak of “light at the end of the tunnel.” S&P 500 futures are 14.75 points higher at 1,289.00 and Dow futures are 112 points higher at 11,911 “Continued…(read more)

Posted To: MBS Commentary

An agreement among the G7 group of finance ministers and central bankers to intervene against the rising yen helped calm global markets last night. “Each of the G7 members will sell yen as their markets open Friday,” said economists at BMO Capital Markets, who say the yen has already tumbled 3% as a result. “This is the first currency intervention of the G7 since 2000 when it moved to support the euro, but it’s not a surprise” said MND’s Adam Quinones. “We’ve all gotten used to the government intervening in financial markets.” Stock futures rallied on the news and Treasuries sold off, but optimism was tempered as tensions intensified in Libya and Japan. Reuters reports Japanese engineers conceded on Friday that burying a crippled nuclear plant in sand and concrete may be a last resort to prevent…(read more)

Posted To: MBS Commentary

Equity futures are rebounding modestly this morning after substantial losses earlier in the week erased all of 2011’s gains. Bonds are backing up in the process. S&P 500 futures are 12.00 points higher at 1,266.00 and Dow futures are up 69 points at 11,647. Since hitting a calendar-year high on Feb. 18, the S&P has shed 83.5 points, or 6.23%, while the Dow has lost 705 points, or 5.72%. Light crude oil rose 1.88% overnight to $99.82 per barrel while gold prices are up 0.16% to $1,401.55. “Investor risk appetite is back on as concerns about Japan’s nuclear crisis have abated somewhat,” said economists at BMO Capital Markets, noting that Japan is adding more workers at the Fukushima power complex and that G7 officials are expected to meet tomorrow to discuss assistance for Japan. The…(read more)