Wednesday, February 22, 2006 - 3:55 pm MST

[Adam in CO]

The consumer price index rose 0.7% in January, higher than expected and due to a 5.0% jump in energy prices. But the outsized gain follows declines in headline consumer prices in the previous two months. Excluding energy and food costs, core consumer prices rose 0.2% on the month and are up 2.1% on the year.

The MBA mortgage applications index rose 0.8% to 578.5% for the week that ended February 17. Purchase applications were up 4.3% on the week but were 2.2% lower on the year. Home buying has clearly peaked and is now trending lower. Refinance applications fell 4.0% for the week and are down a sizable 37.9% for the year. Refinancing activity continues to decline as higher mortgage rates quash profitable opportunities.



Lower oil prices and acceptable core consumer price data resulted in a relief rally on Wall Street Wednesday. The tame, core CPI eased inflation fears while the weekly oil inventory report, due out tomorrow is expected to show increases in supplies of oil and its products. Crude for April delivery fell $1.73 to $61.01 a barrel on the Nymex today. The Dow gained 68.11 to 11137.17, a four and a half year high. The NASDAQ was up 20.21 to 2283.17.

MARKETS CLOSING CHANGE
DJIA 11137.17 68.11
S&P500 1292.67 9.63
RUSSELL 2000 733.53 6.75
NASDAQ 2283.17 20.21
SECTORS - GAINERS & LOSERS
Home Construction +3.98%
Mobile Telecommunications -3.26%



The Treasury's auction of $22 billion in 2-year notes was met decent demand today. The notes drew a high yield of 4.689% and received a 2.24 bid-to-cover ratio compared to 2.11 at last month's auction. 2-year yields are at their highest level in five years as investors anticipate further Fed rate hikes. Treasuries rose on tempered inflation expectations related to the tame core consumer inflation data and remained higher after the auction Wednesday. In late trading the 10-year note was up 11/32 to 99-25/32 to yield 4.52%.

SECURITY YIELD CHANGE
2-Year Note 4.67 -0.03
5-Year Note 4.56 -0.03
10-Year Note 4.52 -0.04
30-Year Treasury Bond 4.48 -0.05



So far this week neither the inflation data nor new supply in the bond market has had yield raising effects. The dearth of economic data continues tomorrow with jobless claims the sole release. Also, the Treasury will auction $14 billion in 5-year notes which are expected to draw strong demand.

For the week ending 02/16/06

RATE LATEST CHANGE FEES
30-Yr Fixed (FHLMC) 6.28 0.04 0.5
15-Yr Fixed (FHLMC) 5.91 0.08 0.5
1-Yr Adj (FHLMC) 5.36 0.02 0.7
3-Mo Libor (FNMA) 4.78 0.01 n/a



RATE LATEST CHANGE
Fed Funds 4.38 -0.12
Prime Rate 7.50 0.00
Fed Discount 5.50 0.00
11th District COF 3.296 0.00

[Adam in CO]

The consumer price index rose 0.7% in January, higher than expected and due to a 5.0% jump in energy prices. But the outsized gain follows declines in headline consumer prices in the previous two months. Excluding energy and food costs, core consumer prices rose 0.2% on the month and are up 2.1% on the year.

The MBA mortgage applications index rose 0.8% to 578.5% for the week that ended February 17. Purchase applications were up 4.3% on the week but were 2.2% lower on the year. Home buying has clearly peaked and is now trending lower. Refinance applications fell 4.0% for the week and are down a sizable 37.9% for the year. Refinancing activity continues to decline as higher mortgage rates quash profitable opportunities.



Lower oil prices and acceptable core consumer price data resulted in a relief rally on Wall Street Wednesday. The tame, core CPI eased inflation fears while the weekly oil inventory report, due out tomorrow is expected to show increases in supplies of oil and its products. Crude for April delivery fell $1.73 to $61.01 a barrel on the Nymex today. The Dow gained 68.11 to 11137.17, a four and a half year high. The NASDAQ was up 20.21 to 2283.17.

MARKETS CLOSING CHANGE
DJIA 11137.17 68.11
S&P500 1292.67 9.63
RUSSELL 2000 733.53 6.75
NASDAQ 2283.17 20.21
SECTORS - GAINERS & LOSERS
Home Construction +3.98%
Mobile Telecommunications -3.26%



The Treasury's auction of $22 billion in 2-year notes was met decent demand today. The notes drew a high yield of 4.689% and received a 2.24 bid-to-cover ratio compared to 2.11 at last month's auction. 2-year yields are at their highest level in five years as investors anticipate further Fed rate hikes. Treasuries rose on tempered inflation expectations related to the tame core consumer inflation data and remained higher after the auction Wednesday. In late trading the 10-year note was up 11/32 to 99-25/32 to yield 4.52%.

SECURITY YIELD CHANGE
2-Year Note 4.67 -0.03
5-Year Note 4.56 -0.03
10-Year Note 4.52 -0.04
30-Year Treasury Bond 4.48 -0.05



So far this week neither the inflation data nor new supply in the bond market has had yield raising effects. The dearth of economic data continues tomorrow with jobless claims the sole release. Also, the Treasury will auction $14 billion in 5-year notes which are expected to draw strong demand.

For the week ending 02/16/06

RATE LATEST CHANGE FEES
30-Yr Fixed (FHLMC) 6.28 0.04 0.5
15-Yr Fixed (FHLMC) 5.91 0.08 0.5
1-Yr Adj (FHLMC) 5.36 0.02 0.7
3-Mo Libor (FNMA) 4.78 0.01 n/a



RATE LATEST CHANGE
Fed Funds 4.38 -0.12
Prime Rate 7.50 0.00
Fed Discount 5.50 0.00
11th District COF 3.296 0.00

[Mrs.ssippi]

there you go again, talking numbers thats hot.

[h2co-pilot]

Adam!

[CO Hummer]

Now I'm torn as to whether i read Adam's post or go play airsoft gun wars.

[Mrs.ssippi]

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by CO Hummer:
Now I'm torn as to whether i read Adam's post or go play airsoft gun wars. </div></BLOCKQUOTE>

Run dont walk