Weekend commentary

Since July the payroll expansion has not been better than today's report on job growth. It has added 215,000 new jobs. This is a great news to retailers for the upcoming holiday season. The unemployment rate was steady at 5%.

Today Gold for December delivery fell $1 to $501.50 an ounce on the New York Mercantile Exchange, after tapping an 18-year high of $504.50.

Today the U.S. dollar turned lower (by 0.1% at 120.33) against the Japanese yen, falling sharply off its highs, on reports that Treasury Secretary John Snow said the Group of Seven will discuss the weakening yen at their meeting this weekend. Since the end of August the dollar had gained about 9% vs. the yen.

The benchmark 30-year fixed-rate mortgage fell to 6.26% from 6.28% a week ago. This is a decline for the 2nd week. Last week's decline was the first in three months as rates had risen up to that point in step with rising Treasury yields. The 15-year fixed loan was unchanged at 5.81%. The one-year ARM (treasury-indexed adjustable rate mortgage), rose to 5.16% from 5.14%. The five-year hybrid ARM increased to 5.76% from 5.75%. [source for mortgage data: Freddie Mac weekly report]

One must note the important trend here -- the gap between long term fixed rate and ARM is reducing thus leading to a declining popularity of ARMs among home-buyers and owners.