U.S. Weekly Jobless Claims Dip To 229,000

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Published Date 11/2/2017

Today's Mortgage Rate Summary

How Rates Move:

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.

Rates Currently Trending: Neutral

Mortgage rates are moving sideways so far today.  The MBS market improved by +4 bps yesterday.  This wasn't enough to improve mortgage rates or fees.   The market experienced low volatility yesterday.

Today's Rate Forecast: Neutral

Jobs: The October Challenger-Grey Job Cuts report showed a very strong labor market with announced corporate layoffs at a 20 YEAR low with a 29,831.

Initial Weekly Jobless Claims hit 229K vs est of 235K. This moved the more closely watched 4-week moving average down to 232,500 which is 35,000 lower than the 4-week average 30 days ago.

Unit Labor Costs improved by 0.5%. However, that is a preliminary read from the 3rd QTR which is very old data and not applicable to Friday's wage data.

Productivity: The 3rd QTR data was much stronger than expected with a big 3.0% reading vs est in the 2.0 to 2.8 range.

Taxes: The House Ways and Means Committee will release the Tax Plan to their members this morning at 9:30 AM EDT and then by 11:15 the general public will learn all the details.

Great Britain (number 5): As widely expected, the Bank of England raised their key interest rate from 0.25% to 0.5%.

Japan (number 3): Their Consumer Confidence moved up from 43.9 to 44.5.

Germany (number 4): Their Unemployment Rate hit 5.6% which matched expectations.

Today's Potential Rate Volatility: High

The big event today is the release of the tax plan to the public. This has the opportunity to create significant volatility in the rate markets.

Bottom Line:

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.

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Daniel Harwood

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