http://MikesDailyMarketReport.com: The Non-Farm Payrolls reported only 199k new jobs for December, far off the 400k forecasts; and much differently than the 807k that the ADP reported on Wednesday. Even with the November revision from 210k on the initial report to 249k, it's still not enough. However, the Unemployment Rate did drop from 4.2% in November to 3.9% for December. The Average Hourly Earnings rose by 0.6% in December while Average Hourly Workweek remained Unchanged (from a downward revision in November) at 34.7 hours per week. This would normally be good news for MBS, but we're still experiencing the Investors reaction to the Fed's Minutes that were released on Wednesday, which brought up the topic of the Fed reducing their Balancesheet thru allowing the maturation of the Bonds/Treasuries and not reinvesting it back into more Bonds/Treasuries. This latter part is not good for MBS/Treasuries -meaning it's pool of buyers has shrunk! We've been seeing Mortgage Rates rise this entire week and haven't seen any end insight yet. Today, we're currently Down 30bps, but we're off our earlier lows (close to being down 60bps). Mortgage Rates continue to worsen! Meanwhile, Yields had spiked to 1.80%, but are now currently back under a tough Technical Ceiling at 1.77%. We'll see if this Technical Ceiling can put a hold on the freefall that we've been experiencing this week.
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