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Bart Castelli

Mortgage Bonds (MBS) Are Up - Mortgage Rates Following

Thursday, February 6, 2014 - Article by: Bart Castelli - Homestar Financial Corporation NMLS #70864 - Message

Mortgage Bonds are a touch lower ahead of tomorrow's big economic event, the January Jobs Report. In today's economic news, all of the scheduled data today came at 8:30 this morning. Weekly Initial Jobless Claims fell in the latest week and have been stuck in a tight range the past month as the labor market continues to experience some pains. Q4 productivity was better than estimates - when productivity increases usually unit labor costs fall as workers accomplish more for less. Finally this morning the Dec US trade deficit was larger than expected. Like the productivity and unit labor costs, the data usually doesn't generate much momentary market interest but it is food for economists to chew on.

Today nothing matters, the bond market should be relatively unchanged by the end of the session; if we are wrong and the bond market experiences any significant movement it is likely to be a decline in prices and increase in rates;hard to square that a rally of consequence will occur.

As I started off with, it is all about tomorrow's January employment report. Investors, funds and traders should by now have their positions worked out ahead of what will be the usual monthly surprise. It is a rarity that employment data doesn't shake things up; depending what the report reveals we can expect a rally or selling pressure but not a yawn from markets, stocks or bonds and mortgages. The "consensus" estimate for non-farm job growth was notched up a little after ADP reported Wednesday private jobs increased 175K, the consensus now is 185K increase in non-farm jobs with the unemployment rate unchanged at 6.7%.

Headed into tomorrow's Jobs Report, I am recommending locking ahead of this highly volatile number. Would you like to discuss this further in regards toyour financing options? Give me a call at 314-744-7806, or visit my website at

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