Mortgage Bond Market Analysis - Non-farm Payrolls, Average Hourly Earnings, ISM Manufacturing Index, yada, yada, yada

It's Friday and it's a data-heavy day.  As I wrote in my blog post on Wednesday, the ADP Private Payrolls and the Non-farm Payrolls have been in lock step for the first three months of the year and I expected the same for this month.  We got a strong reading on Wednesday from the ADP Private Payrolls and this morning, Non-farm Payrolls was also strong coming in at 215K vs. estimates of 205K.  Average Hourly Earnings also ticked up more than expected with a delta of .3% vs. estimates of .2%.  The Unemployment Rate is up to 5% which is a bit of an anomaly on the surface since NFP went up but so did the Labor Force Participation rate in the "more people are looking for jobs category.

The March ISM Manufacturing Index is expansionary again at 51.8 vs. estimates of 50.7 - a reading over 50 is expansionary.  The University of Michigan Consumer Sentiment Index came in at 91 which is a bit above expectations of 90.5.  The only real downer in the data this morning is Construction Spending which was -.5% vs. estimates of .1%.  The FNMA benchmark bond is down 21 basis points this morning because of the positive economic data which is putting a dent into yesterday's 35 point gains.  The fact that oil is down somewhat considerably is helping to minimize the losses.  Overall, the benchmark bond is up 75 basis points for the week which means an improvement in rate of a bit over .125% or an improvement in fees of about $1,500 on a $200,000 loan.  With this morning's sell off, the RSI is coming down from overbought levels.  At 102.49, the bond is 21 basis points below the 1st level of resistance and 39 basis points above the 1st level of support - be careful; if oil recovers a bit, it could be bad news for mortgage bonds and interest rates.  I would lock just to be safe.  With the nice gains we still have this week, locking right now is a good thing.  Here's a quick look at the chart:

Next week isn't very data-heavy but there are some key releases each day next week with Factory Orders on Monday, ISM Non-manufacturing on Tuesday, and FOMC Minutes on Wednesday for starters.  You can download my app (buyerZapp) by clicking on the link in the upper right-hand corner of my blog so that you can get current info on the mortgage bond market and real estate news plus I will alert you if bonds begin moving against you so that you have a chance to lock ahead of a reprice.  I'm available throughout the weekend for anyone who needs a pre-approval on a mortgage in Utah or Nevada - 801-853-8720, 702-812-1214 or jed.wunderli@noblehomeloans.com.  Make it a great day and a better weekend.