Mortgage Rates Sideways Today

Mortgage rates are moving sideways today.  A strong rebound yesterday after the selling on Friday on Yellen’s speech. On further thoughts markets reversed the selling on Friday and actually ended better than prices and yields on Thursday last week prior to Yellen at Jackson Hole. This morning a little pull back but not much in early trading. The MBS market improved by +34BPS yesterday. This was enough to improve mortgage rates and/or fees.    The market experienced high volatility yesterday.

Today we got some Housing data in relation to the June Case-Shiller Home Price Index.  It showed their 20 metro city index with pricing gains of 5.1% on a YOY basis which was close to market expectations of 5.2%. Not a factor in pricing as its older data and from a sample size that is too small. Median prices in Existing Home Sales is a much better gauge.

Consumer Confidence surprised many of us as it had its best reading since September 2015. The August reading came in at 101.1 vs est of 97.0. Some gems from the report are that describing jobs as "harder to find" increased by 1.3% which shows more tightening in the labor market. They also saw their incomes increasing in the near future and many had plans upsize/upgrade their homes.

Federal Reserve Vice Chairman Stanley Fischer said incoming economic data will determine the trajectory of interest-rate increases and expressed optimism that productivity growth will rebound. “The work of the central bank is never done, and I don’t think you can say ‘one and done’ and that’s it,” Fischer said, speaking Tuesday on Bloomberg Television he also said: “We can choose the pace, but we choose the pace on the basis of data that’s coming in.”

The high volatility yesterday was a bit unexpected, but the move to lower rates was welcome.  There is nothing left on the schedule today. Friday’s employment report still the elephant in the room. With employment on the clock we don’t expect much improvement in the bond and mortgage markets. Even with the volatility Friday and yesterday unlikely interest rate markets will move much. Our technicals still remain in neutral levels.