March 9th, 2018 11:10 AM by T. Fanning
Last Updated: 3/9/18Friday's bond market has opened in negative territory following a surprisingly strong headline number in today's Employment report. Stocks are reacting to the data with gains of 182 points in the Dow and 60 points in the Nasdaq. The bond market is currently down 12/32 (2.89%), but strength late yesterday should keep this morning's mortgage rates very close to yesterday's morning levels. If your lender improved pricing intraday Thursday, you may see a slight increase in this morning's rates.Today's only relevant data was a major release at 8:30 AM ET- February's Employment report. The key headline numbers were an unchanged 4.1% unemployment rate, 313,000 new payrolls and a 0.1% increase in earnings. Analysts were expecting to see the unemployment rate slip to 4.0%, only 210,000 new jobs added and a 0.2% rise in earnings. The variance in the unemployment rate is not important to bonds but the payroll number is a significant negative as it points towards a strong employment sector. However, helping to prevent a worse reaction was the weaker than thought earnings reading that eases some inflation concerns that have been a focal point of the markets and the Fed.Overall, we are seeing the bond and mortgage markets react negatively to today's data. There are mixed results in the report, but the spike in payrolls is winning the battle for driving force behind bond trading so far. The good news is that this morning's move in yields puts us close to the recent ceiling we have seen. I believe that if traders were comfortable with yields breaking above that level (2.90%), we would have seen it happen already during early trading. In other words, it is more likely that we will see bond yields and mortgage rates remain at their current levels or improve, than it is we will see a noticeable move higher.Next week is likely to be pretty active for mortgage rates also. There are a couple of key inflation readings and a consumer spending report scheduled along with two Treasury auctions that have the potential to influence mortgage pricing. The week starts with the 10-year Treasury Note sale Monday before heading into the most important data mid-week. Look for details on all of next week's activities in Sunday evening's weekly preview.If I were considering financing/refinancing a home, I would....Lock if my closing were taking place within 7 days...Float if my closing were taking place between 8 and 20 days...Float if my closing were taking place between 21 and 60 days...Float if my closing were taking place over 60 days from now...This is only my opinion of what I would do if I was financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.**http://www.hlmcolorado.com/DailyRateAdvisory
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