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Mortgage Rates Edge Down Mortgage rates edged down the first week of April in response to the tame employment numbers released for March. The additional of only 110,000 jobs to non-farm payrolls and the small increase in wages reassured the U.S. Treasury markets that the Fed would not have to resort to aggressive rate hikes to keep inflation and economic growth under control. Although bonds did not stage a relief rally, steady buying throughout most of the week has kept Treasury prices up and yields, which move in the opposite direction of prices, down. Many analysts believe the movements in the bond markets are due to positioning rather then shifts in response to data. Fed chairman Alan Greenspan inadvertently bolstered Treasury prices by not mentioning the threat of inflation in two separate speeches delivered during the week. Sliding yields, which hit their lowest levels in a month, allowed mortgage lenders to edge rates down on a number of popular mortgage products.

The financial markets had to wait until Thursday to get economic indicators, and even then they were non-events. First-time unemployment claims fell for the first time in three weeks. Applications for benefits dropped by 19,000 to 334,000 for the week ended April 1. The more-reliable four-week average, which smoothes volatility, fell to 336,500, while continuing claims - people collecting benefits for more than one week - rose to 2.69 million. Wholesale inventories in February rose by a weaker-than-expected 0.6 percent, while sales fell 0.4 percent - the biggest decrease in almost two years. The price of oil was volatile, hitting an all-time high on April 4 and then backing down. Oil prices have influenced the equity markets but have been ignored recently by bond traders. Mortgage activity slowed for the week ended April 1, according to the Mortgage Bankers Association. Applications to purchase fell 5.3 percent, and refinances were down 3.1 percent. Rates benefited from the decline in the yield of the benchmark 10-year note, with the rate on the 30-year-fixed mortgage (based on zero discount points) falling back to 5.75 percent. The 15-year fixed-rate edged down to 5.25 percent, while the introductory rate on the volatile one-year adjustable-rate mortgage slid to 3.5 percent.

The drought of economic news ends the week of April 11, with several market-moving reports on the docket. There will be data on manufacturing, retail sales, the trade deficit, and consumer sentiment. Strong numbers on manufacturing and retail sales could take a toll on Treasuries, which also will be vying for attention against a slew of corporate debt. But if reports come in at or weaker than market consensus, mortgage lenders should be able to hold rates near present levels.