Quiet reaction to a firm jobs number. Bankrate's 30-year fixed reads 7.18%, the same as Thursday's later reading, 4 bps under the 7.22% in yesterday's morning pulse and 10 bps under last Friday's 7.28%. The 10-year Treasury yield is 4.86% in early trading against Thursday's 4.84% close. The Bureau of Labor Statistics reports October payrolls up 165,000, unemployment at 4.1% from 4.2%, and August and September revised up by a combined 84,000 jobs, a print that does not hand the bond market a reason to rally.
NEXT is the refunding supply and CPI. The 10-year auction of $42 billion is Tuesday, Nov. 10, inside the Nov. 10-15 CPI window, and the 30-year auction of $25 billion follows Thursday, Nov. 12, the same day as weekly jobless claims and the next PMMS. Freddie Mac's PMMS printed 7.18% on Thursday, its third straight weekly decline. The Dec. 8-9 FOMC meeting carries a dot plot.
RANGE, through the government-loan lens: Bankrate's 30-year at 7.18% is the low of its 30-day window, which runs 7.18% to 7.57%, and sits inside a 90-day range of 6.67% to 7.57%. The 15-year at 6.59% is also its 30-day low, in a 30-day window of 6.59% to 6.84%. Bankrate's other products sit this way against the conventional 30-year: FHA at 6.89% and VA at 6.90%, each about 0.28 point lower, and jumbo at 7.36%, 0.18 point higher. On a $400K loan, principal and interest at the FHA rate is about $2,632 a month against about $2,710 on the conventional 30-year, roughly $78 less, before FHA mortgage insurance, which the rate comparison leaves out.
DO: the segment to work today is the FHA and VA purchase buyer, whose posted rate is the furthest below the conventional number, and the in-flight file closing inside 30 days that is still floating. Do this today: pull every active FHA and VA file, refresh its payment at today's rate with mortgage insurance or the funding fee included, and send the borrower a lock-or-float choice before Tuesday's auction.