Financial markets are still grappling with the resignation of the White House’s top economic adviser, Gary Cohn. A strong reading in the ADP employment report is also making the rounds. Right now, though, mortgage rates are down a little as we approach the halfway point of the week. Read on for more details.
Market Outlook 3.5.18 from Total Mortgage on Vimeo.
Where are mortgage rates going?
Mortgage rates move lower
We’re hunkering down here in CT as another snow storm takes hold, but there’s still a lot of news out today that could impact the direction of current mortgage rates.
Gary Cohn Resigns from White House
The rumors were true, as President Trump’s top economic adviser, Gary Cohn, resigned yesterday after losing the battle on aluminum and steel tariffs.
The departure for Cohn has left many financial market participants concerned that the likelihood of a trade war has now jumped. Cohn, who was a former Goldman Sachs executive, was fairly well liked by investors and gave them a certain amount of confidence with the positions he would take on taxes and regulations.
With him gone, the markets are now left to deal with the possibility of more protectionist policies from President Trump.
Labor Market Heating Up?
The ADP employment report for February is showing a very strong headline reading of 235,000. That’s 30,000 above the consensus reading that analysts came up with.
Investors always keep their eye on the ADP employment report as it’s kind of the appetizer to the main course meal of the Labor Department’s Employment Situation report on Friday morning.
You can never really have to much confidence that the ADP and Labor Department’s readings will match up, though, as they often come in with fairly disparate readings. Still, today’s report has bolstered investor interest in Friday’s report.
Treasury Yields Down
The yield on the 10-year Treasury note (which is the best market indicator of where mortgage rates are going) is down almost four basis points today.
Mortgage rates typically move in the same direction as the 10-year yield, so rates are on the decline today. For the majority of 2018, we’ve seen the 10-year yield steadily rise, but it’s been holding between a fairly tight range of 2.85%-2.90% for the past couple of weeks.
The average rate on the 30-year fixed rate mortgage (according to the Freddie Mac Primary Mortgage Market Survey), has continued to rise every week this year. The pace has slowed in recent weeks, but it has risen. This week’s report will get released tomorrow at 10:00am sharp.
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Rate/Float Recommendation
Take action soon to try and get the best rate
Mortgage rates are on the rise–it’s no secret. If we get a strong headline reading in the monthly jobs report on Friday, that would almost certainly cause rates to jump. Even if we don’t, the long-term projection remains for mortgage rates to move significantly higher.
Learn what you can do to get the best interest rate possible.
We’re talking about potentially another fifty basis points by the time 2018 is all said and done. If you want to reduce your risk of paying more with a higher interest rate, then you should try to lock in a mortgage rate sooner rather than later. At the very least, you should contact a mortgage professional and figure out how your personal factors impact what you should do.
Today’s economic data:
Fedspeak
- New York Fed President William Dudley at 7:30am and 8:20am
- Atlanta Fed President Raphael Bostic at 8:00am
ADP Employment Report
- The ADP employment report showed that 235,000 jobs were added to the U.S. economy in February.
International Trade
- The nation’s trade deficit widened to $56.6 billion in January.
Productivity and Costs
- Productivity got bumped up slightly in the fourth quarter from a tenth of a point decline to no change. Unit labor costs are now at 2.5%.
EIA Petroleum Status Report
- 10:30am
Beige Book
- The Federal Reserve’s Beige Book, which gives anecdotal evidence about the state of the economy in the various Fed regions, will get released today at 2:00pm.
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Notable events this week:
Monday:
- PMI Services Index
- ISM Non-Mfg Index
- Fedspeak
Tuesday:
- Fedspeak
- Factory Orders
Wednesday:
- Fedspeak
- ADP Employment Report
- International Trade
- Productivity and Costs
- EIA Petroleum Status Report
- Beige Book
Thursday:
- Jobless Claims
Friday:
- Employment Situation for February
- Fedspeak
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from Total Mortgage Blog http://ift.tt/2HhkGh9
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