Jobless claims come in higher than expected as the country slowly reopens

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Published Date 5/14/2020

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

Mortgage rates are moving sideways so far today. The MBS market remained unchanged yesterday. This caused rates or fees to move sideways for the day. The rates experienced low volatility yesterday.

Today's Rate Forecast: Neutral

Jobs: Initial Weekly Jobless Claims were higher than expected (2.981M vs. est. of 2.500M). Continuing Jobless Claims rose from 22.377M to 22.833M. New filings have now reached 36.5M since the Covid-19 virus hit.

Genco Olive Oil: Import/Export Prices continue to free fall. Import Prices YOY were down -6.8% vs. est. of -6.2%. Export Prices YOY fell by -7.0% vs. est. of -5.1%.

The Fed: Today we hear from Neel Kashkari, Raphael Bostic, and Robert Kaplan.

Coronavirus: Here are this morning's headlines.

The WHO now says it could take up to 5 years before the global pandemic is under control (They've been correct about very little).
Germany's reopening continues to see a spike in cases as new infections hit 5-day high.
China/U.S. relations continue to be strained with the trade deal at risk.
Global cases more than 4.3M/Deaths >298K.
U.S. cases more than 1.3M/Deaths>84K.

Today's Potential Rate Volatility: Average

Once again today, we're looking for rates to move sideways on low to moderate volatility. The rate markets are trading in a very tight channel for the last two months. The economic data today was of no surprise. Short of something unexpected with the coronavirus, the rates will move sideways.

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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