Jobless claims hold steady

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Published Date 12/28/2017

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 so far today. The MBS market improved by +33 bps yesterday. This was enough to improve mortgage rates or fees. The market experienced moderate to high volatility yesterday.

Today's Rate Forecast: Neutral

Jobs: Initial Weekly Jobless Claims came in at 245K vs est of 240K and matched the prior week's 245K. The more closely watched 4-week moving average is still below 240K at 237,500.

Manufacturing: The December Chicago PMI (aka the "business barometer") was much higher than expected (67.6 vs est of 62.0) and is the highest reading of the year. In fact, its the highest reading in 6.5 years.

Trade Balance: Our trade deficit (importing more than exporting) jumped to $-69.7B vs est of $-67.7B, although our Exports did increase by 3.0%.

Treasury Auction Today: 7 Year note.

Today's Potential Rate Volatility: Low

Like yesterday, we expect mortgage rates to remain in a fairly tight channel. However, given that trading is very thin this week, there is a potential for increased volatility.

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.