Friday, March 26, 2010

Credit market participants are licking their wounds following two dismal Treasury note auctions earlier in the week.


News from the Commerce Department this morning showing the economy grew at a slightly less brisk pace in the fourth quarter than previously estimated went largely unnoticed by mortgage investors. Gross Domestic Product (a statistical measure of the total market value of all final goods and services produced in the country) expanded at a 5.6% annual rate, instead of the 5.9% pace estimated earlier.



The focus of all mortgage investors will shift to next Friday's release of the March nonfarm payroll figures. Most economists are calling for a strong 180,000 job gain in the headline number and a national jobless rate continuing to hover at 9.7%. If the actual numbers match or fall close to this consensus forecast, the impact on mortgage interest rates will likely be minimal -- since these numbers are already "priced-in" to most rate sheets. In the off-chance the actual headline payroll number exceeds 200,000 and/or the jobless rate falls to 9.6% or less -- the upward pressure on mortgage interest rates will increase noticeably.


The mortgage market will close early at noon ET (instead of the more traditional 2:00 p.m. ET) on Friday for the Good Friday Holiday. Friday's going into a holiday weekend historically had higher rates - just an FYI!