Lock Lock Lock

The pressure against the bond market continues again today, with both the stock market and 10 Year Treasury Note yield moving higher. The overhead resistance provided by the 200 and 50 day moving averages has proven too strong to penetrate given the current state of the economy and Federal Reserve. It now appears that things will get worse before we get back to seeing improvement. With a lack of economic news driving the markets, bonds appear poised to follow the path of least resistance, which happens to be counter-productive for mortgage rates.

Tomorrow we will receive the first of three readings on the US market, with ADP set to release their estimate on new jobs created in the month of October. Then on Thursday we will learn the number of new unemployment claims for last week. Lastly, Friday will bring the Mac Daddy of all employment reports when the Bureau of Labor Statistics released their October job growth estimate. It is expected that 190,000 new jobs were created and that the Unemployment Rate will drop down to 5%. The results of this report have the ability to heavily influence mortgage interest rates. Therefore, be on guard and prepared to lock in.

With bonds continuing to drift lower, we will maintain our locking bias.