Following disappointing NFP numbers from last week, U.S inflation will be the key area of focus from the economic calendar and will influence mortgage rates.
Mortgage rates fell back to sub-3% levels after having broken above for just the 2nd time since 21st April.
In the week ending 7th October, 30-year fixed rates slipped by 2 basis points to 2.99%.
Compared to this time last year, 30-year fixed rates were up by 12 basis points.
30-year fixed rates were still down by 195 basis points since November 2018’s last peak of 4.94%.
It was a busier start to the week on the U.S economic data front. Key stats included factory orders, service sector PMI, and ADP nonfarm employment figures.
The stats were skewed to the positive ahead of the end of the week’s all-important labor market data.
Factory orders increased by 1.2% in August, following a 0.7% rise in July. The market’s preferred ISM Non-Manufacturing PMI was also upbeat, rising from 61.7 to 61.9.
According to the ADP, nonfarm payrolls increased by 568k in September versus a forecasted 428k rise. In August, nonfarm payrolls had risen by 340k according to the ADP…
The weekly average rates for new mortgages as of 7th October were quoted by Freddie Mac to be:
According to Freddie Mac,
For the week ending 1st October, the rates were:
Weekly figures released by the Mortgage Bankers Association showed that the Market Composite Index, which is a measure of mortgage loan application volume, slid by 6.9% in the week ending 1st October. In the previous week, the index had fallen by 1.1%.
The Refinance Index tumbled by 10.0% and was 16% lower than the same week one year ago. The Index had declined by 1.0% in the week prior.
In the week ending 1st October, the refinance share of mortgage activity declined from 66.4% to 64.5% of total applications. The share had increased from 66.2% to 66.4% of total applications in the previous week.
According to the MBA,
It’s another relatively busy first half of the week on the U.S economic calendar.
Key stats include Jolts’ job openings and, more significantly, September inflation figures.
While nonfarm payrolls disappointed last week, another pickup in inflationary pressure could force the FED’s hand. Expect yields to pick up and push mortgage rates northwards if inflationary accelerates once more.
With over 20 years of experience in the finance industry, Bob has been managing regional teams across Europe and Asia and focusing on analytics across both corporate and financial institutions. Currently he is covering developments relating to the financial markets, including currencies, commodities, alternative asset classes, and global equities.