January trade balance worse than expected

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Published Date 3/7/2024

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 getting a small boost today. The MBS market improved by +20 bps yesterday. This was not enough to decrease mortgage rates or fees. The market experienced low volatility yesterday.

Today's Rate Forecast: Neutral

Jobs: The February Challenger Job Cuts remained very elevated with 84.638K announced corporate cuts. Initial Weekly Jobless Claims were 217K versus estimates of 215K. The 4 week moving average dropped to 212K. Continuing Claims remained quite high at 1.906M versus estimates of 1.885M.

Manufacturing: The 4th QTR Non Farm Productivity remained at 3.2%, this is the third time that this data has been released. Unit Labor Costs were revised from 0.5% to 0.4%.

Trade: The total Goods and Services Trade Balance for January was worse than expected, $-67.4B versus estimates of $-63.5B.

The Consumer: We will get January's Consumer Credit Change at 3 pm today.

The Fed: We will get day two of Fed Chair Powell's testimony at 10 am, this time in front of the Senate Banking Committee.

Central Banks: The European Central Bank kept their key interest rate at 4.5% and lowered their inflation rate expectations across the board with them showing that they will hit 2% in 2025.

Today's Potential Rate Volatility: Neutral

This morning markets got an initial boost but has already seen some pullback. Volatility has started high at moderate levels.

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

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