Locking Stance

The second of the three readings on our job market was released this morning.  Weekly unemployment claims fell 20,000 from last week’s upwardly revised figure, showing that 331k new unemployment claims were filed last week.  Although still a high figure, considering the national weather challenges, things could have been much worse.  Tomorrow’s highly anticipated BLS Employment Report will be released at 6:30 am MST, and could have a significant impact on the near-term direction of interest rates.

Mortgage bonds fell through significant support yesterday, and have pushed 1/8% higher in the past two days alone.   Given the volatility in the market ahead of the BLS Jobs Report tomorrow, we are going to suggest a locking stance.  Should there be more new jobs created than anticipated, or a reduction in the unemployment rate, mortgage bonds could give up a lot of the gains they have made this year.