The Day Ahead: Empty Econ Calendar

Markets are calm this morning after equities climbed more than 1% Tuesday.

One hour before the opening bell, Dow futures are trading 4 points higher at 10,362 and S&P 500 futures are up 2.00 points to 1,090.75.

The 2-year Treasury note is UNCH at 100-08 yielding 0.496% and the benchmark 10-year note is +0-11 at 100-07 yielding 2.602%. The October delivery Fannie Mae 30 year 4.0 MBS coupon is +0-02 at 102-08 and the 4.5 coupon is +0-02 at 104-02.  Current coupon yield spreads are once again gapping out vs. benchmark Treasuries and the swap curve.

Key Events:

No significant data is scheduled for release today.

However, MBA Mortgage Applications, just published, rose 13% in the second week of August. The jump was led by a 17.1% advance in refinancing activity, which hit a 15-month high. But applications for purchase actually fell 3.4%, breaking a four-week streak. 

The motive for increased refinancings is pretty clear: the average 30-year mortgage rate was 4.60% in the week.

“Mortgage purchase applications have stabilized in recent weeks, but at depressingly low levels,” economists from Nomura commented before the release. “Although applications have proven to be a relatively poor predictor of home sales in recent years, we believe they do contain some information about housing activity. Their failure to rebound more strongly during the summer could therefore point to weak home sales over the next few months.”