Initial Weekly Jobless Claims higher than expected

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Published Date 6/6/2024

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 under mild pressure today. The MBS market improved by +20 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: The May Challenger Grey Job Cuts were 63,816 which was pretty much the same pace as April. Initial Weekly Jobless Claims were higher than expected, up 229K versus estimates of 220K. The four week moving average moved lower to 222K. Continuing Claims remained below 1.8M at 1.792M versus estimates of 1.790M.

Manufacturing: Q1 Non Farm Productivity was revised upward lower from 0.3% to 0.2%. Unit Labor Costs were also revised lower from 4.7% down to 4.0%, which is a very significant revision.

Trade Balance: The April total Trade Balance hit -$74.6B versus estimates of -$76.1B.

Central Banks: Another day, another rate cut. This time the ECB cut their main interest rate from 4.50% down to 4.25% which was widely expected. However, they did not set the stage for another cut at their next meeting. They specified that each meeting is data depending and they are not "pre committing" to any rate path.

Today's Potential Rate Volatility: Neutral

This morning markets are under pressure after several days of gains. Volatility has started at moderate to high levels but we are unlikely to see significant change.

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

All information furnished has been forwarded to you and is provided by thetbwsgroup only for informational purposes. Forecasting shall be considered as events which may be expected but not guaranteed. Neither the forwarding party and/or company nor thetbwsgroup assume any responsibility to any person who relies on information or forecasting contained in this report and disclaims all liability in respect to decisions or actions, or lack thereof based on any or all of the contents of this report.