Market’s puzzled by low Initial Weekly Jobless Claims

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Published Date 10/31/2024

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 are under pressure today. The MBS market worsened by -17 bps yesterday. This was not enough to increase mortgage rates or fees. The market experienced high volatility yesterday.

Today's Rate Forecast: Neutral

Jobs: The October Challenger Job Cuts fell from 73K down to 56K. Initial Weekly Jobless Claims continue to defy all logic by coming in at an exceptionally low 216K versus estimates of 230K. Continuing Claims remain stubbornly high at 1.8762M. The 3rd QTR Employment Cost Index rose by 0.8% which was inline with estimates of 0.9%.

Inflation: The Headline September PCE increased by 0.2% on a MOM basis which matched forecasts. YOY it was up 2.1% versus estimates of 2.1%. Core (ex food and energy) PCE was up 0.3% versus estimates of 0.3% but August was revised higher from 0.1% to 0.2%. YOY, Core PCE was up 2.7% versus estimates of 2.6%.

Incomes and Spending: September Personal Incomes were up 0.3% versus estimates of 0.3% and Personal Spending was up 0.5% versus estimates of 0.4%.

Manufacturing: The bellwether Chicago Manufacturing PMI 41.6 versus estimates of 47.0.

Central Banks: The Bank of Japan kept their key interest rate unchanged.

Today's Potential Rate Volatility: High

This morning markets are under mild pressure due to the inflation and jobs data. Volatility has started high.

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

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