Initial Weekly Jobless Claims drop ahead of Big Jobs Friday

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Published Date 5/2/2024

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 getting some mild support today. The MBS market improved by +32 bps yesterday. This may have been enough to decrease mortgage rates or fees. The market experienced high volatility yesterday.

Today's Rate Forecast: Neutral

Jobs: April Challenger Job Cuts dropped from 90K in March down to 65K in April but still well above trend of 30K. Initial Weekly Jobless Claims were 208K versus estimates of 212K. The four week moving average dropped to 210K. Continuing Claims were 1.774M versus estimates of 1.800M and were below the important 1.8M mark for the second week.

Import/Export: The March data hit -$69.4B versus estimates of -$69.1B.

Manufacturing: The 1st QTR Non Farm Productivity data was lighter than expected, 0.3% versus estimates of 0.8% and Unit Labor Costs were much higher than expected, up 4.7% versus estimates of 3.2%. March Factory Orders matched expectations at 1.6%.

Today's Potential Rate Volatility: Neutral

This morning markets are getting some mild support. Volatility has started at moderate levels as markets wait for Friday's labor data.

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.

Source: TBWS

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