Manufacturing and jobs come in solid as rates push sideways

___

Published Date 10/31/2018

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 worsened by -10 bps yesterday. This may've been enough to slightly worsen mortgage rates or fees. The rates experienced moderate volatility yesterday.

Today's Rate Forecast: Neutral

Housing: Weekly mortgage applications fell by -2.5%. Refinances dropped by -4.0%, and Purchase applications fell by -2.0%.

Jobs: The October ADP Private Payroll report showed a huge jump of 227K new jobs compared to estimates of 189K. September was revised downward from 230K to 218K. Still, October saw the largest increase in 8 months. Small businesses added the fewest with only 29K as they struggle to find talent and/or match higher total compensation from larger corporations. In a separate report, the Q3 Employment Cost Index increased by 0.8% (QoQ) which is the largest quarterly jump since Q4 2017.

Manufacturing: The October Chicago PMI was a little lighter than expected (58.4 vs est of 60.0) but still came in at a very robust level. Both employment levels and production rose at a fast pace.

China: Manufacturing PMI 50.2 vs est of 50.6/Services PMI 53.9 vs est of 54.9

Japan: The Bank of Japan kept their key interest rate at -0.1%

Germany: Retail Sales 0.1% vs est of 0.5%

Eurozone: Unemployment Rate 8.1% vs est of 8.1%/CPI YOY 2.2% vs est of 2.2%

Canada: GDP 0.1% vs est of 0.0%

Today's Potential Rate Volatility: Average

As noted above, we had some very solid jobs and manufacturing data. This is likely to help push rates slightly higher today on moderate volatility. However, so far today, rates are relatively unchanged.

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.

Bank statement for Self Employed are our Specialty! JUMBO LOANS at Amazing rates!