Thursday, August 9, 2012

Mortgaeg Rates on the Rise

Mortgage bond prices opened slightly weaker this morning adding to the losses from yesterday afternoon following mixed data.

The trade deficit came in at $42.92b, expected $47.5b. A falling deficit usually strengthens the value of the dollar and can help rates. The short term reaction was muted as the weekly jobless claims data overshadowed the release.

Weekly jobless claims came in @361k, expected 370k, not rate friendly.

In new from the euro zone, one of the founding fathers of the euro, Otmar Issing, a former European Central Bank chief economist, said that some countries may be forced to leave the currency to save the euro and strengthen Europe. So far we have had little traction on the report but expect continued volatility on this front.

We have a 30Y Treasury auction this afternoon that is likely to factor into trading.

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