Mortgage Rates Bounced Lower Today
The bond and MBS markets lost some ground today, as
mortgage rates bounced a little lower which is nothing unusual ahead of the employment
report. Traders were taking profits and hedging against the data. I recommended
locking in this morning’s report. I am still bullish but not interested in
blind trading.
There is not anything more I have to say this today.
The employment report tomorrow is all markets are thinking about. The estimate
is still for about 200K jobs and 240K private jobs. The unemployment rate is
expected to remain the same. Two things
that will shape the market reaction tomorrow - any revisions from February data
and the average hourly earnings. Kind of
like a standard estimate every month. Earnings have not shown any increase of
consequence for years and are one component that can move markets if earnings
are reported other than 0.2%. The stock market will be closed tomorrow along
with other markets except the bond market at 11:00AM CST.
The Iran negotiations have ended for now. It is
being hailed as the framework for agreement with Iran over its nuclear program
as a “historic understanding,” according to the President. It will lead to
greater safety and security for the U.S. and its allies. It was a step but no
real deal yet - the negotiations will resume in June where a final agreement is
expected.
In summary, today was your last chance to lock
before we get the non-farm payrolls report bright and early tomorrow
morning. It could go either way. At this point ask yourself what would hurt
you more - locking today and pricing improves or floating and pricing
worsens. The safe move was to lock. Hope you all have a good night’s rest.
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