Mortgage Rates Steady

Mortgage rates are moving sideways so far today. Money continues to move to treasuries while the stock market continues to confound most thinkers. North Korea kind of back in the picture, and tax cuts moving forward, although in fits, with Republicans still fighting each other with barbs and nasty comments (Trump vs Sen. Corker). Washington a mess of partisanship. North Korea news that it hacked sensitive data about the US and South Korea plans against North Korea is rattling the cyber community. In the meantime, the US yesterday flew two strategic bombers over the Korean peninsula in a show of force as President Donald Trump met top defense officials to discuss how to respond to any threat from North Korea.

Weekly MBA mortgage apps showed a tad downturn as purchase apps were up and refinance down.

The August Job Openings and Labor Turnover Survey (JOLTS) showed a considerable amount of unfilled jobs just waiting for skilled workers and hit 6.082M which is a very slight pullback from July's level of 6.140M but still just below historic highs. This basically means that the labor market will continue to tighten with an Unemployment Rate of only 4.2%, we have a tremendous amount of open jobs, and the only way to fill them will be to pilfer employees from a competitor - and in the process, pay up to get them to make the switch.

At 10:30AM, the Treasury will auction $24B of 3yr notes, and at Noon, will auction $20B of 10yr notes reopening the issue from August. The demand and how the auction is received will be closely watched by traders and some investors.

Too many central bank speeches? Adds confusion, not clarity. Two economists from the Swiss National Bank, Thomas Lustenberger and Enzo Rossi, refute the idea that increased communications by central bankers have added clarity rather than adding confusion. We echo that, and it isn’t rocket science, US Fed officials out like flies on fruit continue to twist thinking in markets.

We have not gotten the interest rate rally I keep on talking about, but the bond and mortgage markets have stopped increasing (yields), and prices have been stable. I know it is a broken record, but until the stock market succumbs to this continual buying on bets, tax reforms will drive growth and finally capitulates into a correction, or NK fears increase, the rate markets at best will stay about where they now trade. Currently, everything I am seeing and reading showed the momentum oscillators driving rates higher recently hit oversold levels and now moderating but still bearish. Frustrating, but that is the story now.

Mortgage rates should remain relatively flat for the rest of the day. There is nothing on the economic calendar for the rest of the day that has the ability to move mortgage rates.