Mortgage Rate Levels Varies During the Day

Mortgage rates remained close to yesterday's latest levels, though that varies depending on the time of day after the increase we saw from Wednesday’s rates. After some volatility in the immediate run up to the important events, the most prevalently quoted conforming 30yr fixed rate for best-case scenarios is still 4.25%.

The MBS market this morning was on fire, and the 10yr note made an attempt to move lower, the low yield at about 11:00 was 2.56% -3 bp from yesterday after starting higher early.  None of it held however, MBS prices began to worsen around lunch time.   Debate continues about when rates will begin to increase - not much belief that rates will decline. A push-pull trade now - neither bulls nor bears are confident now with their trading.

This week was loaded with data and information. The employment report this morning, yesterday the ECB, both may ISM indexes (manufacturing and services). At the end of the week the 10yr note yield increased from 2.47% a week ago to 2.60% and 30yr Mortgage Backed Securities (MBS) prices were hit hard as well.  

Next week not much key data but Treasury will auction $62B of notes and bonds; Tuesday $28B 3 yr note, Wednesday $21B of 10 yr notes re-opening the current 10 issued in May, $13B of 30 yr bonds, also a re-open from the 30 issued in May.  The inspiration for the next concerted market movement is anyone's guess at this point. It's not safe to plan on rates moving in either direction in the short term, but recent levels of volatility suggest there's not much risk in being wrong.

In summary, today's very important data on job creation came in just a tad below expectations, but that didn't prevent bonds from rallying this morning. However, the rally was short lived as bonds have given up all of their gains. If you floated into today and didn't lock this morning, I would float over the weekend. I am very hopeful that bonds rally to the low end of the range which is around 2.40 for the 10 year.