Treasury Auction, Employment And Mortgages

By
Mortgage and Lending with JB Mortgage Capital, Inc. NMLS# 247447

Two nights ago bonds were staging a significant overnight rally on news reports that Iran was firing missiles and US military bases. Before the overnight rally the 10 year yield was around 1.82% and it plummeted to below 1.70% before moving higher by morning. With news that there were no US casualties bonds completely reversed course and pushed mortgage rates higher on Wednesday.

Heading into today there was some concern that the sell off was going to continue however bonds started to rally after a 30 year Treasury action that had strong demand (a good thing for bond markets and consumer mortgage rates).

Employment Report:

Every month we have the BLS Employment Report and every month it seems like it's one of the most important reports in recent memory. However that's not the case for January as there doesn't seem to be the same sort of anticipation on what the report will show. Despite the lackluster interest it's still an important report for Mortgage Backed Securities and mortgages rates.

Expectations For the Report:

  • 164,000 non-farm jobs created
  • 3.5% unemployment rate
  • Average hours of 34.4 hours per week
  • Wage increase of 0.3%

Last months report was a blockbuster in terms on the number of jobs created (266,000). A blockbuster in the sense that it was significantly higher than what the market was anticipating. Heading into the report the market is fairly stable however if there is a significant beat to what the market is expecting it would not be surprising to see the bond market sell off and mortgage rates move higher. Unless the jobs number is negative it's unlikely the report will have much of a positive impact on bond markets and mortgage rates. Just the nature of the market right now.

Next Week:

New week there is the the Core CPI report, Core Producer Prices report, NY Fed Manufacturing report, Retail Sales report, Import and Export Prices, the Philly Fed Business Index NAHB Housing Market, Industrial Production, Consumer Sentiment and 1 year and 5 year Inflation Outlook.

As for the bond market, lets hope for some stability. A stable bond market allows mortgage companies to price their interest rates a bit more aggressively than if the bond market was volatile.  

Are You Buying A Home?

If you are buying a home and would like to know what documents you need before you apply for a mortgage then we've got the answers for you. The documents needs when you apply for a mortgage are fairly straightforward and most borrowers are able to turn in their documents within 24-48 hours of the initial request.

Keep in mind if it takes you longer than two or three days that may end up delaying your application and closing date so it's important to make sure you send in your documents asap.

 

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Rainmaker
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Bob "RealMan" Timm
Ward County Notary Services - Minot, ND
Owner of Ward Co. Notary Services, retired Realtor

This is a great report Kevin O'Connor and in a format even I can understand. Thank you.

Jan 09, 2020 12:06 PM #1
Rainmaker
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Kevin O'Connor
JB Mortgage Capital, Inc. - Riverside, CA
Helping Homeowners Achieve Their Dreams.

Thanks Bob, have a great week!

Jan 13, 2020 02:08 PM #2
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Rainmaker
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Kevin O'Connor

Helping Homeowners Achieve Their Dreams.
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