January 23rd, 2015 5:54 PM by Dale DiGennaro
Mortgage Backed Securities are up +5/32 (FNMA 30-yr 3.5 at 105.05), around 1/32 above morning levels. December Existing Home Sales increased 2% from November to an annual rate of 5.04M, slightly below the consensus of 5.05M. Existing Sales were 3% lower than one year ago. Total inventory of existing homes available for sale fell 11% to a 4.4-month supply, and it was 1% lower than one year ago.
Median existing home prices were 6% higher than one year ago, and in 2014 they were at the highest level since 2007. Separately, Leading Indicators came in close to expectations. The Dow is down 140 points. For the week, MBS prices rose about 5/32.
Next week could be a big one. Greek elections will take place on January 25 and may indicate an increased level of support for Greece to leave the European Union. In the US, the next Fed meeting will be on Wednesday.
Investors will be looking for hints about the expected timeline for fed funds rate hikes. Durable Orders, an important indicator of economic growth, will be released on Tuesday. The first reading for fourth quarter GDP, the broadest measure of economic activity, will come out on Friday. New Home Sales and Pending Home Sales will round out the busy schedule. In addition, there will be Treasury auctions on Tuesday, Wednesday, and Thursday.