Rates edge higher after flat jobless claims, worst Factory Orders drop in 3 years

Rates up are up again today as the key mortgage bond (aka MBS) coupons are trading lower: Benchmark Fannie Mae 30yr 3% and 3.5% coupons are down 42 and 36 basis points respectively. Lenders hike rates when MBS prices drop like this. Combined with yesterday, these MBS losses mean consumers will see higher rate quotes today. It’s also worth restating a point made yesterday: this week’s MBS price declines aren’t yet extreme and rates are still near record lows, but with a sharp MBS up-trend in recent weeks that’s been driving rates to even lower records, consumers searching for the rate bottom shouldn’t get complacent.

Also all the headlines today will talk of record lows based on a Freddie Mac survey for the previous week. More on that shortly. In meantime, here’s today’s U.S. economic Fundamentals…

Initial Jobless Claims (week ended 9/29/2012)
– New Claims 367,000
– Previous was 359,000 revised upward to 363,000
– 4-Week Moving Average 375,000

Parse this however you want and you wind up with one word – flat.

Challenger Job-Cut Report  (September 2012)
– Announced layoffs 33,816 previous was 32,239. 

Factory Orders (August 2012)
– Month/Month change -5.2%.  This is the worst this data has been in the past three years.  Factory Orders are uneven because they are big ticket goods often purchased in bulk. Nonetheless, this data is ugly.