Market Comment Mortgage bond prices finished the week higher, which pushed rates lower. Rates were positive the first portion of the week in thin trading conditions, which surrounded the holidays. Weaker than expected consumer confidence data Tuesday morning helped rates improve. Confidence was 92.6 versus the expected 94.4. The weekly jobs report released Wednesday was mixed. Jobless claims were slightly higher than expected however continuing claims were lower than expected. Rates saw a small bump higher as a result. Trading was light Friday following the holiday. The ISM Index came in at 55.5 versus the expected 57.5 reading helping rates improve a bit more. Mortgage interest rates finished the week better by approximately 1/2 of a discount point. LOOKING AHEAD
Fed Looks to Data The Fed made it clear that rate adjustments will be in response to future data releases. While there are many market forces that drive mortgage interest rates the Fed remains the leader for now. If the Fed is watching the economic data it would be wise to follow their lead. Economic data often drives trading sentiment in the short-term. A positive or negative release can cause mortgage interest rates to surge higher or lower in a very short time span. Very important releases such as the employment report can set the tone for trading for the month. An absence of data often results in very calm trading. Data is difficult to predict. Estimates often vary wildly from economist to economist and major revisions are all too common. It isn’t difficult to know when an event that can cause market volatility is scheduled. This is crucial in making wise float and lock decisions. Rates are historically very favorable. It would take an unforeseen catalyst to push rates substantially lower in the short term. Floating in this environment is risky. This is especially true ahead of significant economic releases. Copyright 2015. All Rights Reserved. Mortgage Market Information Services, Inc. www.ratelink.com The information contained herein is believed to be accurate, however no representation or warranties are written or implied. |
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