During a light week for economic reports, investors were focused on three big events. However, there was little reaction from all three. For the first time in a month, mortgage rates ended the week a little higher, rising from the best levels of the year.
Three events on Thursday had the potential to significantly affect mortgage rates. However, none of the three caused much reaction. In the U.S., the testimony of former FBI director James Comey did little to change expectations for the investigation of the Trump administration’s dealings with Russia. In Europe, the European Central Bank (ECB) made no change in policy, and there was no additional guidance provided about the timing for a reduction in bond purchases. The third event did produce a surprising result, but it still had little impact on U.S. markets. In the election in the United Kingdom, Prime Minister Theresa May’s party unexpectedly failed to gain a majority in Parliament. This will weaken her position in the upcoming negotiations for the British exit from the European Union.
On Tuesday, the Bureau of Labor Statistics released the JOLTS (job openings and labor turnover rates) report. Fed Chair Yellen has described this data as being very useful in evaluating current labor market conditions. It revealed that job openings in April rose to a record high level and that the quits rate held steady at an elevated level of 2.1%. Both readings are viewed as signs of a strong labor market. A high quits rate is viewed as a signal of strength because workers are more likely to leave their jobs willingly when they are confident about their ability to get another one.
Looking ahead, Wednesday will be the big day this week with the next Fed Meeting. Investors widely expect a federal funds rate hike from the Fed, and they will be looking for guidance about future monetary policy.
Please reach out with any questions in regards to this, and let us know if there is anything we can do for you and your valued clients.
Thank you for your continued support, have a productive week.
SVP, Regional Manager
THE CRAWFORD TEAM
V.I.P. Mortgage, Inc.