Initial Jobless Claims higher than expected

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Published Date 8/1/2024

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 got some initial support today. The MBS market improved by +27 bps yesterday. This may have been enough to decrease mortgage rates or fees. The market experienced high volatility yesterday.

Today's Rate Forecast: Neutral

Jobs: The July Challenger Job Cuts saw a large pull back down to 25,885 from June's level of 48,786. Initial Jobless Claims will hit at 8:30 am ET are expected to be in the 236K range. They were reported at 249k.

Manufacturing: We have the most important manufacturing report of the lot with today's 10 am release of the ISM Manufacturing PMI which is expected to contract with a reading of 48.8. Much focus will be on the Prices Paid and Employment component of this report. We also get the S&P revised Manufacturing PMI and Non Farm Production and Unit Labor Costs.

Central Banks: The Bank of England cut their interest rate by 25BPS to 5.00% with a 5-4 vote with Governor Bailey cautioning on expecting a fast pace of future cuts.

Today's Potential Rate Volatility: Neutral

This morning markets got a mild boost on the jobs data. Volatility has started at moderate levels with a relatively narrow channel.

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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