Mortgage Rates Steady Ahead of NFP Report

A very interesting opening to the market today.  Weekly Jobless Claims came is as expected and stayed inside its range as it has been for nearly 18 months. The more closely watched four week moving average dropped to 263K which is a historical low. Unit Labor Costs in the 2nd Quarter shot up 4.3% which is more than double the market forecasts of 2.1%. Overall this is very solid jobs numbers and negative for mortgage rates.

The 2nd QTR Non-Farm Productivity data was down which matched market forecasts but this is mainly due to the big spike in Unit Labor Costs. ISM Manufacturing was much weaker than expected as the August reading was below 50 and fell short of estimates. Prices Paid did continue to expand, but it also fell short of expectations. Overall, a weak report and at the lowest level since March and positive for mortgage rates. 

So what does this mean for mortgage rates?  This morning we saw some negative direction with both the MBSs and the 10yr as it rose just a tad above 1.60% - our ceiling.  All this ahead of the big report tomorrow.  Then when we got the ISM report, the market shifted whereas we now at 11:00AM see positive MBSs and the 10yr below our ceiling at 1.59%. Mortgage rates are likely to stay in a very tight range today ahead of the very important NFP/Wage Report.