Commentary: Geo-political risk remains a big market variable as mortgage investors put the finishing touches to their pipeline risk management positions in front of Friday's much anticipated February nonfarm payroll report.
The big surge in job creation in the manufacturing sector last month (as reflected in yesterday's ISM Manufacturing Index) month has caused many traders to ramp-up their projections for Friday's nonfarm payroll figure. Analysts, economists and other market participants are currently calling for a net gain of roughly 190,000 new jobs in February - noticeably above the 170,000 new job projections that existed as the week began.
As I write, Fed Chairman Ben Bernanke has completed his prepared text testimony regarding current economic conditions and is now fielding questions from the members of the House Financial Services Committee. Mr. Bernanke's comments have been largely interest rate neutral and he has once again reinforced his view that there is little likelihood that rising oil and other commodity prices will cause a permanent increase in broader measures of inflation pressure within the economy.
As they do every Wednesday, the Mortgage Bankers of America have released their Mortgage Application Survey figures for the week ended February 25th. The MBA said overall demand for single-family mortgages dropped 6.5% -- with purchase requests 6.1% lower while refinance demand slumped 6.5%. The average national contract rate for 30-year fixed-rate mortgages finished the week at 4.84%, down by 16 basis-points from four-weeks ago, up by 3 basis-points from the month-ago mark, and down by 11 basis-points compared to this same time frame in 2010. Refinance applications represent a little more than six out of every ten loan applications taken during the week.
THE MARKET IS ALWAYS RIGHT! . YOU AND I ARE SOME OF THE TIME
