Private payrolls grow by 204K

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Published Date 5/2/2018

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 worsened by -2 bps yesterday. This wasn't enough to worsen mortgage rates or fees. Rates experienced low volatility yesterday.

Today's Rate Forecast: Neutral

Jobs: April ADP Private Payrolls edged out expectations with a 204K vs 200K estimate. March was revised lower from 241K down to 228K. The trendline for ADP is solidly above 200K, and this April reading of 204K is in line with estimates for Friday's NFP of 190K.

Housing: Weekly Mortgage Applications dropped by -2.5% lead by a steep -4.0% decline in Refinance Applications. Purchase Applications fell by -2.0%.

Fed: The Federal Reserve Open Market Committee (FOMC) will release their latest interest rate decision and policy statement at 2:00 pm ET. They will not have a live press conference or updated economic projections (dot plot) at this meeting.

China: Caixin Manufacturing PMI 51.1 vs est of 50.9.

Japan: Markit Services PMI 52.5 vs est of 51.7.

Germany: Markit Manufacturing PMI 58.1 vs est of 58.1.

Eurozone: 1st QTR GDP YOY 2.5% vs est of 2.5%, Unemployment Rate 8.5% vs est of 8.5%.

Today's Potential Rate Volatility: Average

Mortgage rates are likely to move sideways again today. The one thing that could push rates lower and/or increase volatility is something surprising coming from the Fed this afternoon, which is fairly unlikely.

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.

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