Mortgage Rates Down Following ADP Report

Mortgage rates are moving lower so far today.  ADP was expected to show a job increase of 172K for December, but came out with a bit of a surprise as it was up just 153K. The lower job growth suggesting tomorrow’s BLS “official” December employment data may be less jobs than what had been expected.  However, it is not unusual that the two jobs reports differ.

Weekly jobless claims were likely distortion with the holidays as it came in lower than forecasted.  The markets have not given this much credibility and believe it an anomaly due to the holidays. Seven states had to be estimated and holiday weeks are always difficult to read.

The December ISM services index was unchanged from November.  Earlier this morning Markit Economics’ PMI services index declined. There was no noticeable response to the better index by ISM.

Brick and mortar retailers did not fare well in December as Macy’s and Sears reporting more closures and Kohl’s reported sales declines compared to last year. Apple though reporting its app store spending increased 40% in 2016.

The dollar weakening this morning following the weakness yesterday. Crude oil higher, also following yesterday’s increase.

I expect mortgage rate volatility to be tampered a bit today.  Mortgage rates are headed slightly lower so far today.  At 11:00AM, the 10yr has dropped to 2.35% and we have seen a positive upbeat in MBSs at +55.  I do not know if this will hold or we might see some changes in the pricing later this afternoon, but this has been nice since the first week of December when rates were this low.  It is really what you want to do versus the risk you want to take, but as a gambler, and what has happened in the last 30 days, I might just wait and monitor this turn very carefully if you have the time.