Friday, July 7, 2017

What's going on and why does it matter? End-of-Trading-Day Update Bonds finished the week in the red with mortgage bond prices tailing 3 bps and the benchmark yield pushing up against the key technical ceiling of 2.40%. Next week, markets will open with a reaction to G-20 news. Then Friday, we will see a deluge of data including CPI, retail sales, industrial production, capacity utilization, and University of Michigan data. Have a great weekend and be prepared for headlines out of Hamburg to drive rates on Monday morning. ---------------    9am - The non-farm payrolls report came out this morning stronger than market expectations, although the wage component of the report showed slower than expected growth in wages.  The continued strength in the jobs market is likely to keep mortgage bond prices firmly below their critical 100-day moving average, which means that mortgage pricing may continue to deteriorate.  The market will also get a sneak preview into Fed Chair Yellen's semi-annual testimony to Congress next week with the early release today of the Fed's Semiannual Monetary Policy Report. The Fed is scheduled to purchase up to $1.05 billion of GNMA mortgage bonds today. What should you do about it? Lock your rate to be safe, especially while mortgage bonds continue to trade below their 100-day moving average. ] Economic reports that may impact mortgage rates this week: Date Report Period Prior Estimate Actual Mon 3 Jul Construction Spending May -1.4% 0.3%  0.0% Mon 3 Jul ISM Mfg. PMI June 54.9 55.2 57.8 Mon 3 Jul Total Vehicle Sales June 16.66M 16.55M 16.51M Wed 5 Jul Factory Orders May -0.2% -0.5%  -0.8% Wed 5 Jul Fed Minutes June - -  - Thu 6 Jul ADP National Employment June 230,000 185,000 158,000 Thu 6 Jul Initial Jobless Claims Week of June 26 244,000 243,000 248,000 Thu 6 Jul ISM Non-Mfg PMI June 56.9 56.5 57.4  Fri 7 Jul Non-Farm Payrolls June 152,000 179,000 222,000 Fri 7 Jul Average Earnings June 0.1% 0.3% 0.2%