Mortgage note rates are unchanged this week but pricing on rates is slightly worse this morning.
After falling sharply last week weekly jobless claims fell more modestly this week but the fact that they fell again is what is sending an encouraging sign to investors. Given that the Fed has tied ongoing monetary stimulus to an unemployment benchmark (most analysts believe when unemployment reaches 6.5%-7% the Fed will pull the plug on bond buying programs) anytime a positive report on labor conditions is released its likely to send rates higher.
Congress drew one step closer to kicking the debt ceiling debate down the road for a couple more months when the House of Representatives passed the bill. The Senate and President are expected to sign it into law. This means we get to read and write about this topic for weeks to come. If that doesn’t excite you I don’t know what will! 🙂
From a technical perspective mortgage-backed bonds have been trading in an ever tightening range over the past month as the chart below demonstrates.
This increases the likelihood of a “breakout” where rates move sharply. At this point it is more probable that rates will move higher instead of lower.
Current Outlook: locking bias