Conventional and Government (FHA and VA) lenders set their rates based on the pricing of Mortgage-Backed Securities (MBS) which are traded in real time, all day in the bond market. This means rates or loan fees (mortgage pricing) moves throughout the day, being affected by a variety of economic or political events. When MBS pricing goes up, mortgage rates or pricing generally goes down. When they fall, mortgage pricing goes up.
Mortgage rates are moving sideways so far today. The MBS market worsened by -6 bps yesterday. This wasn't enough to worsen rates. The rates experienced moderate volatility yesterday.
Jobs: The March Challenger Job-Cut Report of major corporations announced layoffs dropped from a pace of 76,835 in February to 60,587 in March. Initial Weekly Jobless Claims came in at only 202K vs est of 216K. The more closely watched 4-week moving average dropped down to 213,500 which is near a 50 year low for that average.
Tomorrow's Jobs Data: The key tomorrow is what kind of revisions the February jobs reported by BLS that surprised markets with meager job gains; NFP jobs in February were expected +175K. As released +20K. Private jobs in February were expected 170K; as released +25K. The likelihood of significant revisions is high. Traders are looking for substantial revisions higher. March NFP jobs are expected +170K and private jobs +168K. Reporting on jobs from both the BLS and ADP, although not the case, looks like they both are just guessing. The other key tomorrow, average hourly earnings, for March +0.2% after increasing 0.4% in February. Manufacturing jobs also get attention, expected +10K after increasing 4K in February.
Fed: Today we will hear from John Williams, Patrick Harker and Loretta Mester. We will also get their latest Balance Sheet at 4:30 pm ET.
Trade: Meetings continue in D.C. as Chinese Prime Minister Liu He continues to meet with U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin. Bloomberg is reporting that many of the negotiated measures would have up to 5 years before they are fully implemented by China.
Brexit: They actually passed something...but it wasn't a deal. The House of Commons has passed the Cooper Letwin bill legally requiring Prime Minister Theresa May to request another delay of Article 50. It passed by just one vote (313 to 312). It now heads to the House of Lords to be voted on today. However, the EU doesn't have to accept it all.
Germany: Factory Orders -8.4% vs est of -5.4%
Rates continue to move sideways on low volatility. Tomorrow could be a BIG day with the release of the jobs data. Until then, short of something unexpected from the China trade talks, look for rates to move sideways.
If you are looking for the risks and benefits of locking your interest rate in today or floating your loan rate, contact your mortgage professional to discuss it with them.