1/5/10

Good morning. For economic news yesterday we had the ISM Manufacturing Index, which rose in December for the fifth consecutive month and the highest reading since April 2006. Construction Spending in U.S. decreased in November. To balance that number we had Construction Spending at the lowest level since July 2003 and down 19% from a year earlier.
Helping rates this morning is news that the New York Fed purchased $9.3 billion in agency mortgage-backed securities the week before last. Ahead of us today we have Factory Orders for November (expected to rise) and Pending Home Sales, but anyone who cares is waiting for Friday’s unemployment data. Most analysts feel that economic readings are showing improvements and that in many markets the housing sector may have found its bottom. We’re seeing, so far this morning, a bit of an improvement in rates.