Markets Ignore The April Jobs Report And It’s Good News For Mortgage Rates
On the first Friday of every month, the U.S. government releases its Non-Farm Payrolls report.
More commonly called “the jobs report”, Non-Farm Payrolls is a major market mover. The number of working Americans is directly tied to the health of the economy which, in turn, drives the stock and bond markets.
In general, when jobs numbers improve, it’s good for stocks and bad for mortgage bonds. It follows, therefore, that conforming mortgage rates rise because rates always move opposite of mortgage bond prices.
Conversely, when jobs numbers worsen, it tends to be bad for stocks and good for mortgage bonds. Mortgage rates fall.
Today, markets are behaving a bit differently.
Despite 290,000 jobs created in April 2010 — nearly twice the expected amount — and a 40 percent upward revision of March’s numbers, mortgage rates are essentially unchanged.
In a normal environment, rates would be higher. Today is not normal.
Today is a departure because, for all of the jobs report’s import to Wall Street, it’s less important to markets than what’s happening in Greece right now.
Greece is struggling to meet its debt obligations and its citizens are rioting.
Until a debt solution for Greece is made that sticks, unrest in the region will drive safe haven buying both domestically and abroad. U.S. mortgage bonds will gain on that movement because mortgage bonds are “safe”, and mortgage rates will fall.
Indeed, this is exactly what’s been happening since the start of April. Mortgage markets have been rallying for 5 weeks.
So, today’s jobs news is terrific for the economy and mortgage rates should be rising because of it. But, they’re not. Consider taking advantage — lock in a rate.
Related posts:
- Tying Friday’s Jobs Report To Rising Mortgage Rates
- Good Friday + Jobs Report Data = Major Mortgage Rates Movement
- Nervous About Mortgage Rates Rising? Lock Thursday — Ahead Of Friday’s Jobs Report
Michael Haigh has 20+ years of professional experience in the banking and mortgage industry. He has the knowledge, education, and dedication to get you the best loan for your situation, answer your questions honestly and completely, and make your mortgaging experience a pleasure. His reputation includes being the number one lender in the country for CitiBank for 9 years, then at Chase for 1 year and now with WJ Bradley since August of 2009. This is because of the quantity of loans, myriad of people he's helped, and his dedication to helping his clients find the perfect loan for them.
