Forecast for the Week: The Fed will be watching the latest jobs numbers closely

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The Fed will be watching for the latest employment figures as the November Jobs Report is delivered on Friday.

• The ISM Services Index will be released on Tuesday.
• The ADP National Employment Report is due to be delivered on Wednesday along with Productivity.
• As usual on Thursday, weekly Initial Jobless Claims will be released.
• The week wraps up with more employment data from Friday’s release of the November Jobs Report, which includes Non-Farm Payrolls, the Unemployment Rate and Average Hourly Earnings.
• The Consumer Sentiment Index will also be released on Friday.

Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve. In contrast, strong economic news normally has the opposite result. The chart below shows Mortgage Backed Securities (MBS), which are the type of Bond on which home loan rates are based.

When you see these Bond prices moving higher, it means home loan rates are improving. When Bond prices are moving lower, home loan rates are getting worse.

To go one step further, a red “candle” means that MBS worsened during the day, while a green “candle” means MBS improved during the day. Depending on how dramatic the changes are on any given day, this can cause rate changes throughout the day, as well as on the rate sheets we start with each morning.

As you can see in the chart below, various news stories led to market volatility in recent days. Home loan rates remain attractive.

Chart: Fannie Mae 3.5% Mortgage Bond (Friday Dec 01, 2017)

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