Friday’s bond market has opened in positive territory following the release of some major economic data. Stocks are reacting negatively to the news, pushing the Dow lower by 53 points and the Nasdaq down by 15 points. The bond market is currently up 6/32 (2.20%), which should improve this morning’s mortgage rates by approximately .125 of a discount point.
The Labor Department gave us this morning’s key economic data with their monthly Employment report at 8:30 AM ET. They announced that the unemployment rate remained at 5.3% as expected and that 215,000 new jobs were added to the economy during July. Analysts were expecting to see 229,000 jobs and June’s payroll number was revised higher by 8,000. The average earnings report showed a 0.2% rise, matching expectations.
Overall, two of the three biggest readings in the report pegged forecasts and the payroll number showed good job growth but just a little softer than many had expected. The data does have some analysts renewing their call for a September Fed rate hike, causing the weakness in stocks. It is my opinion that this report is slightly favorable for mortgage rates but closer to neutral. We just did not see enough of a variance from forecasts for the report to influence bond trading and push mortgage rates either direction. In other words, somewhat of a dud report in what is traditionally a market mover.
Next week only has a couple of reports scheduled that we need to be concerned about. There are also two Treasury auctions set that tend to be influential on mortgage rates. None of those events are taking place Monday. It could be a calm day Monday unless something unexpected happens over the weekend because I don’t see today’s report and trading having a residual effect. Look for details on all of next week’s calendar in Sunday evening’s weekly preview.