Market Focus: OPEC

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Published Date 6/2/2022

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 today. The MBS market worsened by -34 bps yesterday. This was enough to increase mortgage rates or fees. The market experienced high volatility yesterday.

Today's Rate Forecast: Neutral

Manufacturing: April Factory Orders hit 0.3% vs. est. of 0.7%. Q1 Non Farm Productivity was revised upward from -7.5% to -7.3%. Unit Labor Costs were also revised upward, 11.6% to 12.6%

Jobs: May Challenger Grey Job Cuts showed only 20,712 which was lower than April's pace. Initial Weekly Jobless Claims were lighter than expected (200K vs. est. of 210K). The more closely watched 4 week moving average dropped to 206,500. Continuing Claims fell to 1.309M vs. est. of 1.3325M. The May ADP Employment Change was only 128K vs. est. of 300K, plus April was revised lower.

Oil: OPEC meetings are in full swing and any expected increase in oil output will be slightly favorable for rates.

Today's Potential Rate Volatility: Neutral

This morning markets are quieter as they wait for the Friday jobs report. Volatility has started at moderate levels but will spike on major news from OPEC.

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.