Industry News
Mortgage Industry News
Treasury Prices Low On European Debt Crisis
10/19/2011
Treasury prices are slightly lower this morning as speculation continues to swirl around the European debt crisis. After reports on Monday that Germany was downplaying the likelihood of a quick solution, yesterday provided a surprise report that Germany and France had agreed to bolster the EFSF, European Financial Stability Facility, to $2 trillion Euros. The big question still remains of how to actually use the fund. Today’s economic calendar is/was relatively busy this morning. The early morning release of the weekly MBA mortgage applications index showed a drop of -16.6%. The drop was not unexpected given the recent selloff, as refinances plunged -16.6% vs an -8.8% slide in purchase activity. At 8:30, the economic calendar produced a relatively benign Sept CPI report that showed slightly lower core results of +0.1% vs estimates of a +0.2% gain. Lastly, mixed news on new home building in the US with the Sept housing starts report exceeding expectations but building permits showing a larger than expected drop. Currently, the 10yr yield is at 2.205% (2.134% Tuesday) and the 2-10 yield spread is at 194bps, steeper by 8bps since yesterday morning.
