Jobless Claims Dip In The Face Of Coronavirus Fears

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: LOWER

Rates are moving lower so far today on high volatility.  The MBS market improved by +27 bps yesterday.  This caused rates or fees to move lower for the day on high volatility.

TODAY’S RATE FORECAST: LOWER

Jobs: The February Challenger Job Cuts report dropped from 67,735 announced layoffs/cuts in Jan down to 56,660 in Feb. Initial Weekly Jobless Claims were right in line with estimates (216K vs. est. of 215K). Productivity: The 4th Qtr Non-Farm Productivity was revised from 1.4% down to 1.2%. Unit Labor Costs for that period were revised lower from 1.4% to 0.9%.

Factory Orders: January’s reading hit -0.5 vs. est. of -0.3%.

Oil: OPEC agrees to 1.5M barrel output cut, but Russia doesn’t sign on.

Coronavirus: Here are the latest headlines.

• IMF approves a $50B emergency package.
• Congress approves $8.3B package, Senate, and President both say they will pass it.
• Dr. Fauci (of HIV fame), says 15-20% of US cases will require hospitalization, which would cripple the health care system.
• The Department of Health and Human Services said it plans to purchase 500 million N95 respirator masks for health-care workers.
• California, Florida, and Washington State all declare State of Emergency.
• China confirms Covid-19 attacks the nervous system and confirms 2 strains with the “L” strain more prevalent and deadly that the “S” strain.
• NJ, TN, and NV join the list of states with confirmed cases.
• NYC Confirms 2 more cases that were “community-based” (not from contact with travel persons from China, etc.).
• UK chief medical officer confirms ‘human-to-human’ infections are happening in the UK.

TODAY’S POTENTIAL RATE VOLATILITY: HIGH

The volatility in the equity and rate markets remain at very high levels. Look for that to continue through the week. Markets have very little concern over economic data at the moment and are instead worried about what the next few months will look like with the coronavirus.

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