Rate Update February 5, 2010

Mortgage rates are slightly better this morning.

This morning’s jobs report was a mixed bag of data which is drawing a wide range of commentary amongst analysts.

Within the report there was data that would ordinarily cause rates to rise.  This included…

  • The number of jobs created in November 2009 was revised higher to 65,000.
  • The headline unemployment rate dropped from 10% in December to 9.7% in January.

Within the report there was data that would ordinarily cause rates to fall.  This included…

  • The number of jobs lost in December was revised higher to 150,000.
  • Q4 worker productivity jumped by more than expected and labor costs declined by more than expected (anti-inflationary).

The markets are trying to interpret the data.  Currently stocks are trading lower on the day and mortgage-backed bonds (MBS’s) are modestly better.  We wouldn’t be surprised to see some volatility throughout the day.

We are going to shift to a floating position because MBS prices have managed to break through technical resistance.  However, we may not be floating for long.

Current outlook: Float