A weaker than expected jobs report released on Friday has helped mortgage rates improve to start this week.
The all-important jobs report which came out Friday showed that only 88,000 new jobs were created in the US economy during the month of March. This is far below expectations of 200,000. Taken with other lackluster economic data released last week and you can see why mortgage rates have improved.
The economic calendar for this week is fairly light until we get to Wednesday when minutes from the Fed’s last monetary policy meeting will be released. Given that this was released before Friday’s jobs report we may see more talk about unwinding quantitative easing which has been unfriendly to interest rates so far this year.
The European debt crisis continues to flare up. This time Portugal sparked the coals when it was announced that some of their austerity measures pushed through in order to obtain bailout funds were found to be unconstitutional. The Prime Minister is now exploring other options for spending cuts. In the meantime, uncertainty is helping US interest rates.
From a technical perspective mortgage-backed bonds appear to be overbought making them ripe for reversal in the near term. Having said that mortgage-backed bonds have also managed to trade above the 100-day and 200-day moving averages which historically have been strong levels of support. I still think locking in these gains is the way to go.
Current Outlook: locking