US jobless claims drop to 44-year low

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Published Date 10/19/2017

Today's Mortgage Rate Summary

How Rates Move:

Conventional and Government (FHA and VA) lenders set their rates based on the pricing of Mortgage-Backed Securities (MBS) which are traded in real time, all day in the bond market. This means rates or loan fees (mortgage pricing) moves throughout the day, being affected by a variety of economic or political events. When MBS pricing goes up, mortgage rates or pricing generally goes down. When they fall, mortgage pricing goes up.

Rates Currently Trending: Neutral

Mortgage rates are moving sideways to slightly lower so far today. The MBS market worsened by -26 bps yesterday. This was enough to worsen mortgage rates or fees. The market experienced moderate volatility yesterday.

Today's Rate Forecast: Neutral

Jobs: Initial Weekly Jobless Claims were much lower than expected (222K vs est of 240K). The more closely watched 4-week moving average dropped by over 20K down to 248,250.

Manufacturing: The October Philly Fed Manufacturers Business Outlook Survey was much higher than expected (27.9 vs est of 22.0). Both new orders and backlogged orders were among the highest levels in 8 years.

Leading Economic Indicators: The September reading produced a very rare reading below zero, coming in at -0.2% vs est of 0.1%.

Fed: Today we get Esther George.

Geopolitical: The Senate is getting ready to vote on the FY 2018 Budget which it can do via a simple majority, and then it goes to reconciliation with the House and is a needed precursor to Tax Reform.

China (number 2 economy): Their Retail Sales hit 10.3% vs est of 10.2%, Industrial Production was up 6.6% vs est of 6.2% and their GDP matched expectations of 6.8%.

Japan (number 3 economy): The All Industry Activity Index came in at 0.1% vs est of 0.2%.

Great Britain (number 5 economy): Ouch! Their Retails Sales tanked -0.8% vs est of -0.1%.

Today's Potential Rate Volatility: Average

Yesterday mortgage rates moved higher with moderate volatility. Today, we're likely to move slightly lower with once again moderate volatility. Mortgage rates continue to move sideways and we don't expect anything to come out today to change the current trend.

Bottom Line:

If you are looking for the risks and benefits of locking your interest rate in today or floating your loan rate, contact your mortgage professional to discuss it with them.

Source: TBWS

All information furnished has been forwarded to you and is provided by thetbwsgroup only for informational purposes. Forecasting shall be considered as events which may be expected but not guaranteed. Neither the forwarding party and/or company nor thetbwsgroup assume any responsibility to any person who relies on information or forecasting contained in this report and disclaims all liability in respect to decisions or actions, or lack thereof based on any or all of the contents of this report.