Mortgage Rates Slightly Higher Ahead Of Jobs Report

Mortgage rates are trending slightly higher this morning.  Last week was extremely volatile as the rates finally came down, not as much as the actual rate, but in regards to the fees associated with such quotes.

This week is Jobs Week, which we get a glut of jobs related data this week culminating in Big Jobs Friday. We will be paying very close attention to Average Hourly Wages (currently at +2.4% on a YOY basis) and the Non-Farm Payroll (NFP) data. The reading for September is probably not as much of a factor as the revisions to the prior months. August was reported at only 151K but we have seen significant revisions to Augusts in the past due to the seasonal adjustments.

After last week's better than expected Chicago PMI, will we have a strong round of data this week in regards to manufacturing? So far, yes. The ISM Manufacturing report was a very solid 51.5 vs est of 50.3 and proved that August's 49.4 was a fluke and not a trend. The Market PMI report showed a slight improvement from August (51.5 vs 51.4). We also get Factory Orders this week. But the focus of bond traders/mortgage rates will be on Wednesday's release of the ISM Services sector which accounts for 75% to 80% of our economic output.

Like it is every week, the Feds will give us a steady stream and the markets will be taking their comments and the Jobs data on Friday to hedge ahead of the Nov/Dec FOMC meetings.

We could see some volatility during the week, but I am expecting mortgage rates to be fairly calm headed into Friday's job report, with the exception of Wednesday's ISM Non-Manufacturing report. Currently at 11:00AM, we have the 10yr at 1.62% and the MBSs in negative territory.