Tomorrow brings the month's most important economic report: the Employment Situation, often referred to simply as "the jobs report."  No other piece of economic data has remotely the same track record of inspiring movement in the bond market (which, in turn, inspires movement in interest rates).

But not all interest rates are equal--especially not these days.  Mortgage rates are in an advantageous position relative to benchmarks like the 10yr Treasury yield (which is typically an excellent barometer for mortgage rate momentum).  Exceedingly strong demand for mortgage-backed bonds is part of the reason.  That demand has been created both by the Fed's bond buying programs and the fact that investors are hungry for bond market assets that have slightly higher yields than the vanilla options such as Treasuries.

The bigger factor is that mortgage rates have only been able to fall at a certain pace over the past 9 months.  If they'd kept pace with the bond market, lenders would have become overwhelmed.  There would also be unacceptably big, paradoxical, upward pressure on rates due to the arcane math that determines the value of mortgage bonds (for those that know a bit about that stuff, yes, I'm referencing overly-quick payoffs causing investors to reprice the risk of getting their principal back before they've had a chance to earn any interest on it).

The upside to rates' measured pace of improvement is that they have a ton of insulation against broader bond market volatility.  In other words, even if tomorrow's jobs report causes drama for Treasuries, and even if that drama manages to spill over to the mortgage bond market, mortgage RATES themselves are still more a factor of lender capacity.  Thus, they would only experience a fraction of the drama seen elsewhere in the market--if any!