Mortgage Rates Not Moving Much After Jobs Report

The big day that everyone has been waiting – and the report did not jump out as much as the news we got on Wednesday. Before the data was released, we saw some positioning yesterday afternoon as everyone had their opinion on what this number would be.  We got Non-farm jobs at +235K, which was 40K more than what was originally predicted, but not as much as some had been trying to see with their trades.  Looking inside the numbers, which will be hashed out all day, the average hourly earnings did not go up as much as what was anticipated. There was also an increase of people exiting the labor force or might suggest some who had given up looking for work are starting to come off the sidelines. The revisions in December and January numbers resulted in a positive 9K number. The Unemployment Rate dropped from 4.8% to 4.7% which matched expectations.

So, what does this mean?  The market has been on a roller coaster for the past three hours as we have seen the 10yr fluctuate but is near the open at 2.60%, with the MBSs seeing wider swings within 43BPS and is now only a positive 6BPS. 

The last hurdle to next week’s anticipated FF increase has been successfully cleared. The FOMC WILL increase the FF rate next Wednesday by 0.25%. Traders in the FF futures markets have marked up to almost 100% probability.

Great employment numbers denoted above. The MBS market moved lower toward the end of the day yesterday (higher rates). With employment numbers coming in strong and pretty much in line with expectations, mortgage rates are moving sideways to a little lower so far today. I do not expect mortgage rates to move too much more for the rest of the day now that the big news is out and mortgage rates appear to have stabilized.