Friday’s bond market has opened in negative territory following the release of September’s employment figures. The stock markets are reacting positively to the data with the Dow up 151 points and the Nasdaq up 47 points. The bond market is currently down 13/32 (2.48%), which should push this morning’s mortgage rates higher by approximately .250 of a discount point.
The Labor Department gave us this morning’s highly important economic data with the release of September’s Employment report at 8:30 AM ET. It showed that the U.S. unemployment rate fell 0.2% to 5.9% last month while 248,000 new jobs were added to the economy. Both numbers were stronger than expected. The average earnings reading showed no change from August’s level, falling short of the 0.2% that was forecasted
Also worth noting in today’s report were a couple of upward revisions to previous payroll numbers. In the release we learned that August had 38,000 more jobs than previously announced and July was revised higher by 31,000. Those indicate that the employment sector was stronger this summer than many had thought. The flat earnings reading is favorable for bonds and mortgage rates, but the payroll numbers and unemployment rate are drawing much more attention. Therefore, we should consider this morning’s release bad news for the bond and mortgage markets.
Next week has very little scheduled for release in terms of economic reports. However, there are a couple of items that will drive bond trading and mortgage rates, including the minutes from the last FOMC meeting and two Treasury auctions. Nothing is scheduled for Monday, so we can expect weekend news to have the biggest influence on Monday’s trading and rates. Look for details on next week’s activities in Sunday evening’s weekly preview.
©Mortgage Commentary 2014