The most significant piece of economic data released this morning was the productivity and costs report. Productivity came in at 1.8%, higher than the estimate of .5%. Labor Costs came in at 2.1%, lower than the estimate of 3.0%. This report is always a mixed blessing for the mortgage market because higher productivity and lower lower labor costs are generally stimulative for the economy, which can raise mortgage rates, but those factors suggest that inflation might be under control.
Another piece of data today was a relatively strong reading from Mortgage Applications. This does not have much of an effect on trading as even analysts are aware that the MBA (who compiles this report), counts ALL applications, even repeated attempts at failed financing. So in a market such as this with desperation to refinance, plenty of people wanting to cash in on cheap property, and extremely low interest rates enticing refinances and purchases alike, we're bound to be showing strong in this area.
In Stocks, the Dow is up slightly right now at 43 pts. And the 10 year treasury is down in price as well. But it would be a shame if you were watching treasuries for an indication of mortgage rates because, at least for the moment, Mortgage Backed Securities (MBS), are not down in price.
On the day, MBS's are holding the line at unchanged to 1/32nd better from yesterday. If this continues for the next 20 minutes, we will see the same to slightly improved pricing from lenders today.
Lock comment: It almost feels a little too calm today. With some analysts predicting another surprise Fed rate cut, there is potential for big unexpected news for the market to digest. It's a good day to lock if you're conservative. Rates have come low enough, fast enough that there is more upward pressure on them than downward pressure from a purely technical standpoint.
If you feel that yesterday's market tumble was indication of more bad news to come, floating may pay off. Whatever you do, this has been a volatile MBS market of late, so have your loans ready to lock if need be, and keep an eye on the markets and on this blog. I have a feeling something is going to happen to push MBS's off the fence today.