A positive retail sales report is signaling to investors that the U.S. economy is in solid shape. That’s causing more money to flow out of stocks and into bonds, pushing up Treasury yields and mortgage rates.
This upward momentum is something we expect to continue, which is why we’re recommending that borrowers take action on a purchase or refinance soon. Read on for more details.
Market Outlook 5.14.18 from Total Mortgage on Vimeo.
Where are mortgage rates going?
Treasury yields rise after strong retail sales report
The big market moving news that’s making the rounds this morning is the positive readings in the retail sales report.
While the April numbers did come in at levels right around where analysts had projected, it was the revisions to the March report that really got investors riled up.
The already strong 0.6% rise in March got bumped up to 0.8%, along with upward revisions to all of the other readings as well.
Retail sales are an important measure of the U.S. economy as it reflects how willing consumers are to part ways with their spending money.
With a strong report like the one out today, it shows that the U.S. economy is in fairly good shape.
That signals to investors that they can take on slightly more risk, meaning they move more into stocks and out of safer assets like government bonds.
If we look at the yield on the 10-year Treasury note, which is the best market indicator of where mortgage rates are going, we can see that it’s up over six basis points today to 3.06%.
Mortgage rates typically move in the same direction as the 10-year yield so they’re experiencing some upward pressure today.
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Rate/Float Recommendation
Locking now is likely the smart move
As expected, mortgage rates have begun to move higher once again. This is a trend that we expect to continue for the coming weeks and months as the Federal Reserve continues to tighten the nation’s benchmark interest rate.
If you’re considering buying a new home or refinancing your current mortgage rate, it definitely makes sense to take action sooner rather than later, as it’s far more likely rates will be higher than lower in a few months.
Learn what you can do to get the best interest rate possible.
Today’s economic data:
Retail Sales
- Retail sales rose 0.3% month over month
- Retail sales less autos rose 0.3% month over month
- Retail sales less autos and gas rose 0.3% month over month
Empire State Mfg Survey
The Empire State Index hit a 20.1 for May. That’s up about six basis points from the April reading.
Business Inventories
Business inventories remained flat in March.
Housing Market Index
The housing market index ticked up to a 70 for May. That’s a strong reading that points towards optimism among the nation’s home builders.
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Notable events this week:
Monday:
- Fedspeak
Tuesday:
- Retail Sales
- Empire State Mfg Survey
- Business Inventories
- Housing Market Index
Wednesday:
- Housing Starts
- Fedspeak
- Industrial Production
- Atlanta Fed Business Inflation Expectations
- EIA Petroleum Status Report
Thursday:
- Jobless Claims
- Philadelphia Fed Business Outlook Survey
- Bloomberg Consumer Comfort Index
- Fedspeak
Friday:
- Fedspeak
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from Total Mortgage Blog https://ift.tt/2II4HNq
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