[Mortgage Minute] Week of Oct 31, 2016

European Data Pushes Rates Up

When it comes to the bond market, good economic news is bad news for rates.  In the UK, third quarter GDP growth was stronger than expected, and Spain’s unemployment rate declined more than expected. Given the better than expected European data, concerns grew that the ECB may provide less stimulus via it bond purchase program. In addition, an official of the Bank of Japan (BOJ) said that the BOJ may not increase its bond purchase program. Bond purchases from central banks around the world have helped push global bond yields lower in recent years, so indications that there may be less stimulus in the future caused yields to rise, including U.S. mortgage rates.

 

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Week Ahead:

Factors: This week will be packed with central bank meetings and economic reports. The Core PCE price index, the inflation indicator favored by the Fed, will be released on today. On Tuesday, ISM Manufacturing will come out and a Bank of Japan meeting will take place. A U.S. Fed meeting will take place on Wednesday, but no significant change in policy or in guidance is expected. Finally, the important monthly Employment report will be released on Friday. As usual, this data on the number of jobs, the unemployment rate, and wage inflation will be the most highly anticipated economic data of the month.

 

Volatility:         Moderate

Trend:              Higher

 

For specific rate information, please contact a Tradition Mortgage Loan Officer.  Check back next week for more industry updates!