Mortgage Rates Lower - Markets Still Volatile

Mortgage rates are moving lower today.  After yesterday turn of events, you are probably just as bewildered as I am while I write my commentary this morning.  Last Friday, we started to see some retracement that we have all been talking about and it was finally being realized by the markets when the mortgage bonds that affect rates were starting to retreat. But this week has seen more of the volatility that has been hanging around now for nearly six weeks.

This morning we got the big jobs report and we really got a mix bag of data.  The estimate was as much as was expected, but the ADP numbers from Wednesday still had the markets skittish on what to expect.  The bigger news was the revisions on October and September numbers, which overall only resulted in a negative two thousand jobs.  There is now a new number that economists are looking at because of these types of revisions, and that is the 3-month rolling average, which stayed the same even with the revisions. 

The Unemployment Rate dropped to 4.6% which is the lowest since September 2007 and was significantly less than the forecasts of 4.9%. The Participation Rate dropped down to 62.7% as another 446K workers left the work force. That means that now there are 95.1M people that not in the work force which is an all-time high.  Average Hourly Wages were not what the market was expecting, as this is moving upwards at a slower pace than what was anticipated.

The Feds are out today, but again, nothing much to report as you know all that they want is to be seen and heard, and nothing they say really means anything since Janet Yellen put them all their place earlier this year.

There are a few things in Europe that is rattling some cages, especially in Italy that has the ECB concerned, and is affecting the markets just a bit over in the US.

Once again, I am expecting a choppy day for mortgage rates.  Currently at 11:00AM, we have a very robust MBSs figure of +45BPS, and the 10yr is below 2.40% which I like to see at 2.39%.  The Italian vote is overshadowing the jobs data that came out this morning.  The uncertainty in Italy is pushing money to safety which is helping our mortgage rates.  Look for this to continue to bring volatility to mortgage rates.