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Weekly Recap and The Financial Markets

Weekly Recap and the Financial Markets

Much of last week’s news was positive for mortgage rates far outweighing the relatively minor unfavorable factors. Mortgage rates ended the week lower and at their best levels of the year.

Investors are increasingly concerned about conflicts in Syria and North Korea and sought relatively safer investments including mortgage-backed securities (MBS); this was positive for rates.

Another factor helping rates was the latest polls in the French election. They showed gains for candidates who urge leaving the European Union (EU). French elections are done in rounds; the first round takes place April 23 and the second round a couple of weeks later. If France seeks exit from the EU, it could lead to major changes in Europe. This also caused investors to shift to safer assets.

Comments from President Trump also were positive for mortgage rates. On Wednesday, Trump said the dollar is “getting too strong” and he likes “a low-interest rate policy.” Since Trump appoints the Fed Chair, his support for looser monetary policy caused mortgage rates to decline.

Despite global uncertainties, recently released data showed that U.S. consumer sentiment remained at the elevated levels seen since the election. The preliminary reading for consumer sentiment from the University of Michigan rose to 98, above the consensus of 97, and the second highest level in years.

Looking ahead, geopolitical events will continue to influence U.S. markets. The NAHB housing confidence index came out yesterday. Builder confidence for newly-built single-family homes remained solid in April, falling a meager three points to 68 after an unusually high March reading. Housing Starts and Industrial Production are released today. Existing Home Sales will come out on Friday.

Posted on April 18, 2017 at 7:47 am by Rob Williams

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