There is reason to believe that the price on the government's 7-year notes has been discounted enough since the start of the week that both foreign and domestic investors will be solid buyers at today's $32 billion auction. We have a good set-up underway this morning -- and if it holds through the conclusion of bidding at 1:00 p.m. ET -- this event should have little, if any impact on the current level of mortgage interest rates.
There is a slight chance that a holiday in Japan might reduce demand enough that the yield (interest rate) on these securities will edge higher. If so, a poorly bid 7-year note auction will almost certainly put upward pressure on mortgage interest rates before the market close. While such an event is possible - it does not currently appear to be probable.
Earlier this morning the Labor Department reported the number of workers filing first-time claims for unemployment benefits fell by 11,000 to a seasonally adjusted 448,000 during the week ended April 24th. The data is certainly moving in the right direction - but until the total number of initial jobless claims falls below 400,000 on a week-over-week basis - the sustainability of a recovery in the labor sector will remain inconclusive as far as mortgage investor are concerned - and that is a condition that tends to support steady mortgage interest rates.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment