Wednesday, March 8, 2017 - Article by: James Brooks -
By James Brooks
The bond market is down 14/32 (2.56%), which will likely push this today's mortgage rates higher by approximately .250 of a discount point.
There were two pieces of data posted early this morning. The one that surprised the markets was ADP?s private sector payroll number at 8:15 AM ET. It showed that 298,000 new jobs were added, greatly exceeding forecasts of 180,000. Because this points towards strength in the employment sector, it is clearly bad news for bonds and mortgage rates. It also raises expectations for Friday?s monthly government Employment report. Fortunately, this release is considered only to be moderately important to the markets or we could have seen a much bigger move in rates this morning.
The second report of the day was the revised Productivity index for the 4th Quarter. It came in at up 1.3%, matching the initial estimate that was posted last month, but falling short of the 1.5% that was expected. Stronger levels of worker productivity are considered good for the bond market. Since this report that doesn?t draw too much attention and the focus this morning has been on the ADP number, this news has had little influence on today?s mortgage rates.
Also going on today is the first of this week?s two Treasury auctions that are likely to affect mortgage rates. 10-year Treasury Notes are being auctioned today, followed by 30-year bonds tomorrow. Results of both sales will be posted at 1:00 PM ET each day. If investor demand was high, we may see bonds rally during afternoon trading as it would hint that investors still have an appetite for longer-term securities. However, weak demand in the sales could lead to selling and another increase in mortgage rates.
The only relevant economic release tomorrow morning is last week?s unemployment update at 8:30 AM ET. It will give us a small snapshot of the employment sector and is expected to show that 240,000 new claims for unemployment benefits were filed last week, up from the previous week?s 223,000. The higher the number of claims, the better the news it is because rising claims indicates a softening labor market. But since this is only a weekly report, it likely will not have much of an impact on mortgage rates unless it shows a sizable variance from forecasts.
If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Lock if my closing was taking place between 21 and 60 days... Lock if my closing was taking place over 60 days from now.
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