Courtesy Tony Guaraldi, VP of Mortgage Lending Guaranteed Rate

Welcome to our Friday update. The Jobs report for February is out and it beat expectations coming in at 175,000 jobs created above expectations of 150,000.  Additionally there were upward revisions from the past two months reports of 25,000 additional jobs created.

CLICK HERE for the current mortgage rate sheet.

One potential concern from the report for Mortgage Bond pricing was the hourly earnings increased by 0.4% for February.  If this continues the increase in wages can lead to inflation pressure.  As we’ve discussed in the past inflation is the arch enemy of fixed income investments such as Mortgage Bonds.  One uptick does not make a trend but we’ll keep an eye on this moving forward.

Over all this was a good jobs report but it did not blow the doors our either.  The reaction in Mortgage Bond pricing is exactly as you might expect which is the price got worse today but it did not fall through the floor either which is good.  As of now the strong floor of support at the 200 moving average (blue line) is holding.  You can see pricing tried to break below it this morning illustrated by the lower wick on the candle chart, but then bounced back mid-morning and is clearly above the 200 day now.  This is encouraging support and we’ll be looking float new transactions into the weekend to see if bond price can recover some of the losses from this week as we appear to be on the bottom of the trading window right now.

CLICK HERE for the full summary with graph.

Tony Guaraldi, VP of Mortgage Lending

tony.guaraldi@guaranteedrate.com

www.guaranteedrate.com/tonyguaraldi

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