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Both the European Central Bank and the Bank of England left their respective interest rates on hold, relieving some of the pressure on the U.S. dollar.

Had rates increased, it would have increased the relative return of investing in euro- or pound-denominated instruments versus investing in dollar-denominated instruments.  This would have drawn dollars from mortgage bonds and have pushed rates higher. 

But, it didn't.

Instead, mortgage bonds are flat right now as traders prepare for tomorrow's jobs report.  Whispers on the street are calling for an in-line figure -- somewhere near 100,000 jobs.

There are a lot of scenarios that could benefit mortgage rates shoppers, but I am not optimistic that we'll see them.  It's a gut feel based on stories I am reading and business leaders to whom I am talking.  I've been wrong before, though.

In a worst-case event for mortgage bonds, The Doomsday Scenario looks like this:

• August's net loss of 4,000 jobs is revised lower
• September's report exceeds the 100,000 new jobs created expectation

The combination of the above data points would suggest that the credit crunch forced a huge blow-out within Corporate America, but that the pain was ephemeral.  Such a large swing in "new jobs" would suggest that those same businesses that cried poor in August are now pressing forward with internal growth plans as if nothing ever happened.

It would suggest that businesses looked at the credit markets as just a speedbump instead of a roadblock.

This could really complicate things for the Fed come October 30-31.

Down in August, up in September means that the Fed may have jumped the gun by lowering the Fed Funds Rate by 50 basis points at its last meeting and that will spark serious discussion about the role of the Fed in the economy.

And not in a good way; in a way that will create fear and uncertainty.  Incidentally, those are the two worst caretakers for mortgage rates that I can think of.

Dan Green is an active loan officer. Email or call 513-443-2020. Dan is on Twitter at @mortgagereports.