| Last | Change | Percent | |
| S&P Futures | 2020.5 | 3.4 | 0.17% |
| Eurostoxx Index | 3408.6 | 38.5 | 1.14% |
| Oil (WTI) | 50.79 | 1.2 | 2.46% |
| LIBOR | 0.253 | -0.002 | -0.59% |
| US Dollar Index (DXY) | 94.25 | -0.254 | -0.27% |
| 10 Year Govt Bond Yield | 1.73% | 0.07% | |
| Current Coupon Ginnie Mae TBA | 103.6 | -0.2 | |
| Current Coupon Fannie Mae TBA | 103.2 | -0.3 | |
| BankRate 30 Year Fixed Rate Mortgage | 3.79 |
Stocks are higher this morning after the Greek government backed off from the ledge and decided not to restructure their debt. The Greek 10 year is trading at 9.68%, down 126 basis points from yesterday. The German Bund has officially passed the Japanese Government Bond in yield. There is generally a risk-on feel as G7 debt gets sold to buy the PIIGS.
Vehicle sales are coming in strong this morning as we go through an upgrade cycle.
The ISM New York dropped by a lot in January, from 70.8 to 44.5. Factory orders fell 3.4%, but it could be weather-related.
James Bullard is speaking this morning, calling the 10 year yield "astonishingly low" and talking up the US economy.
Construction Spending rose .4% in December, lower than estimates. In his latest budget, Obama proposed a one time tax on overseas earnings to pay for infrastructure spending. Of course this is going to go nowhere as Republicans will only entertain special taxes like this in the context of overall corporate tax reform. Special taxes are going to be traded for lower rates, not stimulus spending.
About 10% of US refining capacity is offline as a union walkout has launched the biggest strike since 1980. Talks have been going on since January 21. The workers want higher wages and to pay less in deductibles and premiums for health care. If the workers get what they want, it could mean that we will finally start seeing wage inflation in the US. Of course the other issue could be wage increases being eaten by rising healthcare costs...
Old merger arbitrage professionals might feel a sense of deja-vu. Office superstores Staples and Office Depot are in talks to combine. This is the second time these two companies tried to merger - the first time was blocked by antitrust regulators in 1997. (The internet? Whats that?)
Banks are easing standards for mortgage loans, however some have noted weaker demand for mortgages linked to purchase activity, according to the Fed's Senior Loan Officer Survey. This is a strange observation given that the MBA Purchase Index is up about 26% in January...
Agency Mortgage REIT giant American Capital Agency reported earnings yesterday. They have been aggressively moving down-coupon in TBAs, which is one of the big reasons why higher coupon TBAs have underperformed so much on the way down. This means a borrower is going to be somewhat disappointed in the points they receive for going up in rate.
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