Mortgage Bond Market Analysis

ADP Private Payrolls came in at 230K vs. expectations of 220K.  This is causing investors to sell which is pushing rates slightly higher.  The support and resistance levels have been adjusted downward through this slow downturn and the benchmark bond is still oversold although it looks like the bias might be changing.  If this happens and investors believe it then there could be some serious selling.

Thursday and Friday should give us more insight as to the employment portion of the recovery - if jobless claims are down tomorrow and non-farm payrolls are up on Friday, expect a couple more days of selling.  Any big surprises could move the market in a big way.  Depending on your tolerance for risk, you may want to lock your rate today in advance of the data releases tomorrow and Friday. Here's today's chart:

It's important to remember that even though we've had a steady decline over the last 15 trading days, bond prices are still strong which means rates are still really great even from a short term perspective.  Of course if you look at it from a historical perspective, rates are incredibly low.  If it would me, I wouldn't be greedy and I 'd lock today but the decision is always up to you.

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