Mortgage rates moved higher over the past 2 days, but managed to find their footing today.  I'll be the last person to claim interest rates and stock prices must follow one another, but at times, their relationship is the most convenient way to understand the market.  Stocks had been rising last week while rates were holding at the lowest levels since September 2017.  More than anything, this reflected optimism on both sides of the market surrounding potential Fed rate cuts in 2019.

Last Friday provided some important insight.  The hotly-anticipated jobs report came out much weaker than expected.  That's the sort of thing that would certainly make traders all the more likely to expect Fed rate cuts.  Indeed that was the case, but trading levels suggested the bond market had already found its maximum level of optimism (i.e. lowest rates) earlier in the week.  The jobs report merely restored those lows (instead of helping rates break through).  

Ever since then, and with an added push from the de-escalation of a US/Mexico trade war over the weekend, rates moved higher in an attempt to find their minimum level of optimism.  Yesterday and today suggest they may have found it!  The fact that stocks are also ebbing from recent highs suggests the overall market may have now carved out a trading range from which to approach the bigger considerations ahead.  

In practical terms, this wasn't a huge victory for mortgage rates today.  It merely helps us get back some of yesterday's losses.