Federal Reserve Chairman Ben Bernanke will address the Senate Banking Committee today in his semiannual report. Early speculation suggests Bernanke may reveal QE3 measures to stimulate economy growth.
The 10-year treasury yield is down to 1.48 % this morning. Also, the Producer Price Index for June and the University of Michigan's Consumer sentiment index will be released later this afternoon.
The initial jobless claims report released this morning revealed 350,000 new claims. Also, the talks surrounding a potential third round of quantitative easing (QE3) has cooled as the Fannie Mae 30 year coupon experienced a drop today.
MBA Mortgage Applications are down 2.1% from last week along with the Refinance Index which has also dropped 3%. Also, mortgage-backed securities prices are trading up this morning ahead of the afternoon release of the FOMC meeting minutes.
The 10-year treasury yield is up a couple basis points this morning ahead of the $32 billion auction of three-year notes scheduled for this afternoon. The auction will be the first of three scheduled for this week.
The Federal Reserve may announce a third round of quantitative easing during their meeting scheduled for later this afternoon. Moreover, the disappointing manufacturing and job reports released last week lead many to believe a QE3 will be announced as early as today.
The CEO of Barclay's (British bank) resigned yesterday amid an interest rates scandal in which the bank was fined 290 million Euros last week. Also, mortgage rates are near record lows today.
Mortgage-backed securities opened flat this morning as the European Union summit wrapped up day one of their two day meetings in Belgium. Also, the Personal Income report came in up 0.2 %.
The 10-year yield is up four basis points today, neutralizing movement from yesterday. Also, the S&P / Case Shiller Home Price Index will be released this morning.
When the Federal Reserve announced the expansion of operation twist Wednesday, many analyst believed the Fed was setting the table for a third round of quantitative easing. If analyst are correct and a QE3 is rolled out in August or September, there is a strong possibility that mortgage rates will increase as well.