Market Focus: Jobless claims jump, more stimulus on the way, and coronavirus news

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Published Date 4/23/2020

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

Rates are moving slightly lower so far today. The MBS market improved by +12 bps yesterday. This caused rates or fees to mostly move sideways for the day. The rates experienced moderate volatility yesterday.

Today's Rate Forecast: Neutral

Housing: March New Home Sales hit 627K vs. est. of 645K

Jobs: Initial Weekly Jobless Claims increased by another 4.427M vs. est. of 4.200M. Continuing Claims are now 15.976M which is lower than expectations of 16.476M.

Stimulus: Hundreds of members of the U.S. House of Representatives will gather in Washington today to presumably pass a $484 billion coronavirus relief bill, bringing the unprecedented total of funds approved for the crisis to nearly $3 trillion.

Coronavirus: The following are the headlines that are getting the attention of bond traders this morning.

U.S. cases at least 843K, deaths at least 47K
Global cases well over 2.6M, deaths 184K
EU will buy junk bonds (important as Italy about to be downgraded to junk)
Bank of Japan will have unlimited bond purchases

Fed: The biggest player on the demand side of the MBS trade, the Federal Reserve Bank of New York, will purchase MBS today. They will purchase $3.188B of 2.5 and 3.0 coupons at 9:50 am ET, and then again at 1:00 pm ET.

Today's Potential Rate Volatility: Average

Rates are trailing slightly lower so far today on negative economic numbers this morning. While these numbers aren't unexpected, they are helping to push rates lower. Look for rates to move sideways to slightly lower throughout the day. Of course, anything unexpected on the coronavirus front can push extreme volatility into the market.

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.