Normally a better than expected economic release, especially one as influential as the Employment Situation Report, gives stock traders a reason to buy. However the current market environment is far from normal. Instead of rallying, stocks moved lower which led to another flight to safety in the Treasury market. Mortgage-backed security prices did benefit from the rush to buy risk-averse Treasury assets, but the gains seen were not large enough to warrant noticeably better mortgage rates. While consumer borrowing costs are at their best levels of the year, this is another reminder that lender rate sheets do not always keep up with improvements in benchmark Treasury yields.
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