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Friday, April 3, 2015

Mortgage Bond Market Analysis - The good, the bad, and the ugly edition

Happy Friday and be glad you have a job.  If you don't have a job, it may be hard to find one based on today's non-farm payrolls report.  Yesterday the weekly initial jobless claims exceeded expectations and the benchmark bond sold off pushing rates a bit higher with the bond ending the day down 25 basis points.

The UGLY:  About face.  Backward, march. This is about what happened this morning considering that expectations for non-farm payrolls were 245K and came in at...126K.  This is a HUGE miss.  To compound this extremely poor data reading, the previous three months were revised downward a combined 69K.

The Bad / confusing: Recently we've had some strong consumer confidence numbers but they have all been because of good jobs reports since they are translating into any consumer spending to speak of.  It will be interesting to see the next consumer confidence reports to see how this abysmal jobs report impacts them.

The Good:  The FNMA benchmark bond is 31 basis points off its morning high but is still up 40 basis points on the day and has trended up over the last half hour.  Including yesterday's decline, we are up a net 15 basis points.  It is currently at 102.71, 16 basis points above the 2nd resistance level.  I continue to recommend floating with caution if you have a loan closing 15-30 days out - always be ready to lock quickly (this means your loan officer has to be on top of the market).

Feel free to contact me if I can help with anything mortgage related - 702-812-1214.  Make it a great day and a better weekend.

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