1. Rates Edge Down as Yields Rebound
Yields on U.S. Treasury securities bounced back up to levels of last Friday thanks to a big decline in first-time jobless claims and an auction of $14 billion in 10-year notes that failed to meet expectations. Profit-takers also may have entered the market as Treasuries have been on a non-stop rise since the release of a weaker-than-expected January employment report on Feb. 4. During that run the yields on longer-term government debt, which move in the opposite direction of prices, fell by close to 20 basis points. The steep decline in yields allowed mortgage lenders who use them to set rates edged rates down on most mortgage products.
2. Yield on 10-Year Note Dives Below 4 Percent
A sell-off on Wall Street and a successful auction of 5-year Treasury notes sent money flying into the bond market on Wednesday. Prices of Treasuries climbed across-the-board and their yields, which move in the opposite direction of prices, continued to fall. This is the second consecutive day of strong buying in Treasuries, and much of the enthusiasm was based on a good response from indirect buyers (primary dealers and foreign central banks), who bought 40 percent of today's offering and a respectable amount on Tuesday. The last of the three such events will be held Thursday when $14 billion worth of 10-year notes go on the block. Strong selling in technology stocks, spurred by Cisco System's disappointing quarterly report, spread throughout the equity markets. This ignited additional safe-haven buying in Treasuries, and the yield on the benchmark 10-year note that lenders use to set mortgage rates hit a 20-week low. This influenced lenders to keep rates at attractive levels.
3. Rates Edge Down as Treasury Yields Slide
Mortgage rates continued to trend downward on Tuesday in response to steady buying in longer-term U.S. Treasury securities. The price of the benchmark 10-year note climbed and its yield, which moves in the opposite direction of price, fell to its lowest level since the end of October. This allowed mortgage lenders who base their rates on yields to keep them low on some mortgage products and edge them down others.
4. Mortgages Hover Stable, Longer Treasury Maturities See Yields Dip
Prices of U.S. Treasury securities hovered stable in the short end but rose in the longer maturities on Monday, buoyed by the dollars advance, perceptions that U.S. budget deficit might not worsen and further optimism that inflation will not flare. Steady Treasury yields allowed mortgage rates to remain basically unchanged from Friday's levels.
5. Mortgages Hover Stable, Longer Treasury Maturities See Yields Dip
Prices of U.S. Treasury securities hovered stable in the short end but rose in the longer maturities on Monday, buoyed by the dollars advance, perceptions that U.S. budget deficit might not worsen and further optimism that inflation will not flare. Steady Treasury yields allowed mortgage rates to remain basically unchanged from Friday's levels.
6. Employment Report Spurs Bond Rally -- Rates Edge Down
U.S. Treasury traders went wild Friday on news that only 146,000 jobs were added to non-farm payrolls in January. Buying in Treasuries was aggressive as worries about bigger Fed rate hikes evaporated. Prices, especially on long-term debt, soared and yields, which move in the opposite direction of prices, plunged. The weaker-than-expected January employment report calmed fears that big increases in payrolls would drive up wages and spawn inflation -- the sworn enemy of fixed-rate assets. The unemployment rate also dropped to 5.2 percent -- its lowest level since September 2001. This number is obtained from a separate survey and does not carry the weight that job additions do. The Labor Department also reported that hourly wages increased by a modest 0.2 percent, and December payrolls were upwardly revised to 133,000 from 112,000. This news did not deter buying, although Treasury yields did close off of their lows of the day. The steep decline in yields, which lenders use as a guide to set mortgage rates, pushed the rate on the 30-year fixed to 5.375 percent and had a positive effect on other products as well.
7. Rates Hold Firm Ahead of Jobs Report
There was a lot of news for the financial markets to digest the day prior to the January employment report. Wall Street was disappointed by weaker-than-expected earnings from some top companies, while bond traders worried about a slide in productivity and an increase in costs that could ignite inflationary fires. A drop of 9,000 filing for jobless benefits also raised a yellow flag about the strength of the labor market. While selling in U.S. Treasuries was not aggressive, prices on most government debt edged down and their yields, which move in the opposite direction of prices, rose.
8. Rates Not Affected by Fed Hike
The Federal Open Market Committee, the policy-making arm of the Federal Reserve Board, raised short-term interest rates to 2.5 percent -- an increase of 25 basis points (one-quarter of 1 percent). The move, which was fully priced into the markets, turned out to be a non-event. Prices of U.S. Treasury securities, which can be affected by Fed rate hikes, showed little reaction to the news and closed near Tuesday's levels.
9. Fed Does the Expected: Raises Rates by 25 Basis Points
The Federal Open Market Committee, the policy-making arm of the Federal Reserve Board, raised short-term interest rates to 2.5 percent -- an increase of 25 basis points (one-quarter of 1 percent). This move was expected and fully priced into the markets.
10. Rates Little-Changed into Fed Credit Decision
Prices of U.S. Treasury securities closed a wait-and-see session little-changed Tuesday, held in check by sizable gains in U.S. equities and data that suggested a mixed economic outlook. Yields, which move opposite of prices, clung close to Monday's levels as traders took a guarded approach on the first day of the Federal Reserve's two-day policymaking committee meeting.
posted @ 2:32 AM
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