Mortgage Rates Held Their Ground

Mortgage rates held their ground at 8-month lows today.  This time around, it was far less eventful than yesterday's session, which saw rate changes several times throughout the day (and in opposite directions to boot!). The absence of volatility and drama in the realm of mortgage rates is indicative of the general absence of drama in financial markets.  Both oil and stocks ended the day very close to unchanged.  All of the above is consistent with investors playing it safe ahead of tomorrow morning's Employment Situation.  This is the biggest piece of economic data each month and it always has the potential to send rates in either direction in a big way.

More nasty news with factory orders this morning as orders dropped from November figures, and November was revised even lower.  US manufacturing not competitive in the global markets with the strong dollar and global weakness - except auto and truck sales holding well. Weekly jobless claims increased more than everyone thought today, and this is the second time in three weeks that there has been a surprise.

The dollar continued to weaken today against the yen and euro currency.  Crude oil after increasing the last two sessions is slightly lower today. Still hearing forced rumors that OPEC and Russia want to cut production but so far nothing from OPEC or Russia directly. Feeding rumors usually happens at a turning point, lemmings always bite on them.

MBS prices generally unchanged from initial pricing this morning, with the 10yr declining to 1.86%.  Right now, everything I am seeing continues bullish at the moment.

In summary, bond and equity markets took a breather today, with neither changing much on the eve of January's NFP report.  10yr treasury yields once again stayed near recent lows, but had no motivation to drop further.  The market will see its second jobs report of 2016 tomorrow.  This will certainly impact trading and does have the potential to end downward trending mortgage rates.  If you are happy with your rate go ahead and lock in.   The down trend can only last so long and you do not want to lock after the trend turns a corner.