In response to the near 2 month high in the 10 yr Treasury yield, Bankrate.com said the average 30 yr mortgage rate rose to a 3 1/2 week high at 3.45%. It’s obviously still historically low but the move higher dilutes the Fed’s best attempts to lower it further. The day before the MBS driven QE3 began, the 30 yr FNMA coupon was 2.36%. It closed yesterday just 6 bps lower. Also, the Fed has spent about $650B on buying Treasuries 6-30 yrs out in the OT program begun on Sept 21, 2011. The day before it started the 10 yr yield was 1.94% and the 30 yr was 3.2% vs 1.82% and 3.0% respectively today. A lot of money has been spent between OT and QE3 for very little incremental reward. The true cost, yet to be determined, will of course occur when the likely market forced exit begins. More likely to seasonal distortions at yr end rather than the uptick in mortgage rates, the MBA said refi’s fell 13.8% and purchases were lower by 4.8%. Ahead of tomorrow’s decision from the BoJ, the yen is falling again and the Nikkei rallied another 2.4% to above 10,000 for the 1st time since April. In Europe, the euro is rising to near an 8 month high after Germany’s IFO business confidence figure rose 1 pt to 102.4 vs the est of 102. The drop in the Current component was offset by a 7 month high in Expectations. The ECB said they will again start accepting Greek bonds as collateral for repo. The Greek 10 yr bond is at a new high at .48, up another 2.5 pts. Lastly, Spanish PM Rajoy said “We have taken the decision to not ask” for a bailout but that doesn’t rule out “in the future we won’t take the decision to ask for it.”
Interest rates/Japan/Europe
December 19, 2012 8:58am by
This content, which contains security-related opinions and/or information, is provided for informational purposes only and should not be relied upon in any manner as professional advice, or an endorsement of any practices, products or services. There can be no guarantees or assurances that the views expressed here will be applicable for any particular facts or circumstances, and should not be relied upon in any manner. You should consult your own advisers as to legal, business, tax, and other related matters concerning any investment. The commentary in this “post” (including any related blog, podcasts, videos, and social media) reflects the personal opinions, viewpoints, and analyses of the Ritholtz Wealth Management employees providing such comments, and should not be regarded the views of Ritholtz Wealth Management LLC. or its respective affiliates or as a description of advisory services provided by Ritholtz Wealth Management or performance returns of any Ritholtz Wealth Management Investments client. References to any securities or digital assets, or performance data, are for illustrative purposes only and do not constitute an investment recommendation or offer to provide investment advisory services. Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Past performance is not indicative of future results. The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others. The Compound Media, Inc., an affiliate of Ritholtz Wealth Management, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. Investments in securities involve the risk of loss. For additional advertisement disclaimers see here: https://www.ritholtzwealth.com/advertising-disclaimers Please see disclosures here: https://ritholtzwealth.com/blog-disclosures/
Posted Under
UncategorizedPrevious Post
5 Signs Plaintiffs Are Winning RMBS WarNext Post
Japanese trade deficit widens further