Tuesday, March 2, 2010

Different day - same story.



Action in the mortgage market will likely be tightly range bound in advance of Friday's February payroll report. It's likely going to be difficult for mortgage interest rates to move significantly higher until we see a sustained improvement in job creation - and that's an outcome not expected for several months yet.


In addition, the Federal Reserve's pledge to keep its short-term benchmark interest rates low and the constantly changing headlines surrounding the debt crisis in Greece should keep global capital flowing steadily into the relative safe-haven of dollar denominated assets like Treasury obligation and mortgage-backed securities for at least the majority of the week.



The consensus forecast among economists calls for a drop of 50,000 jobs for Friday's headline nonfarm payroll figure and an uptick in the national unemployment rate to 9.8% from January's 9.7% mark. If the consensus forecast proves accurate, this data will tend to be supportive of steady to perhaps fractionally lower mortgage interest rates. In the highly unlikely event the February nonfarm payroll data shows a loss of 10,000 or fewer jobs and/or the national jobless rate posts a reading of 9.7% or lower -- look for mortgage investors to push mortgage interest rates higher from current levels.