After mortgage rates rose sharply last Wednesday they recovered most of the losses on Friday following a lower than expected jobs report.
In cased you missed it, the Bureau of Labor Statistics reported on Friday that the US economy added just 209,000 new jobs during the month of July. This was below expectations of ~235,000 new jobs. The lower than expected jobs number breaks a string of stronger than expected reports.
After a very loaded economic calendar last week this week’s schedule of events is light. We expect mortgage rates to take direction from the stock market and technical trading patterns.
US stocks are starting the day modestly higher. However, there is still a growing contingent of analysts that believe the US stock market is ripe for a correction which would bode well for mortgage rates.
From a technical perspective mortgage rates continue to fluctuate within a narrow range. A chart of the US 10-year treasury yield, which mortgage rates tend to follow, shows that is has traded between 2.40% and the 100-day moving average since the beginning of February. We’d love to see the yield breakthrough 2.40% so we’ll start the week by floating. However, we need to be careful because we still believe rates will rise over the long-haul.
Current Outlook: floating