Blogs

It has been another quiet day in the financial markets with not much movement since the open this morning. Mortgage continue to get the play and have improved from the early morning pricing levels. There was no real news, no economic reports and nothing to get much attention.

Interest rates doing better in early trade this morning on weaker stock indexes. Seems like its every other day for the bond and mortgage markets, up one day, down the next. At 9:00 the 10 yr note +8/32 after being down 8/32 yesterday, its yield at 3.68% same as last Friday. Mortgage prices at 9:00 +4/32 (.12 bp), the DJIA index -20 points. At 9:30 the DJIA opened -7, 10 yr +8/32 and mortgages +4/32 (.12 bp).

Some very minor improvement in mortgage prices from 9:30 this morning, but not enough for us to float overnight. We suggest continuing to lock overnight and not float; the risk is too high.

A weaker start in the rate markets this morning with the stock indexes unchanged at 9:00 this morning. In Asia stocks rallied on better employment reports, in Europe retail sales were better than expected. The decline in US jobs was less than expected and the unemployment rate held unchanged at 9.7%; Asia is getting a boost this morning on the increased view that US job markets have likely bottomed. At 9:00 the 10 yr note -10/32 3.71% +3 BP, mortgage prices -7/32 (.22 bp). At 9:30 the DJIA opened +5, 10 yr note -9/32 and mortgage prices -4/32 (.12 bp) frm Friday's close.

Never seems to fail; every first Friday of the month when the employment report hits, markets convulse with high volatility. Today was the same; the less than expected non-farm jobs (-36 compared to -70K expected, and the unemployment unchanged with markets looking for an increase of 0.1%) triggered huge selling this morning in the treasury and mortgage markets. Mortgage prices at 9:30 were off just 5/32 (.15 bp) then by 10:15 selling increased driving mortgage prices down 43 bp on the day. Most lenders stepped in and re-priced about 11:15; in the meantime we warned it would happen and suggested locking everything. This afternoon however prices improved off the lows as the volatility continued. The big lenders re-priced worse at about 1:00 but most have just recently re-priced again to the better.

At 8:30 the Feb employment report hit; non-farm jobs were down just 36K and the unemployment rate unchanged at 9.7%. Through the week the estimates for NFP jobs had been continually increased with markets focusing on the bad weather in Feb, by yesterday the forecasts had jumped to 75 jobs lost due to weather. Early this week the estimates were -10K. January job losses were revised to -26K frm -20K, in Dec the revision was from -150K to -109K; take the three months together and there has been no job losses in the past three months. Construction jobs were down 64K (likely the weather), goods-producing jobs were down 60K, temporary jobs +48K, census workers accounted for 15K jobs, according the report government jobs declined 18K.  State and local governments reduced employment by 25,000 during the month, while the federal government added 7,000; mostly census workers.