Home Loan Rates
Mortgage rates are at the best levels in over a month today thanks to weakness in the US stock market.
Trade Tensions Escalate
Speaking at a NATO summit President Trump commented earlier today that a trade deal with China may not come until after the 2020 election. Furthermore, he said he may use trade sanctions to punish countries who do not fund a fair share of NATO’s budget.
On the news US stocks declined. The S&P 500, Nasdaq Composite, and Dow industrials were all down over 2% in midday trading. Bad news for the stock market is good news for interest rates.
Locally, job growth in Oregon is slowing but as economist Josh Lehner points out this is mainly due to fewer job hirings, possibly because of tight labor market, rather than layoffs (which is a good thing).
The week ahead
Aside from the employment report the weekly economic calendar is relatively light. Therefore, I expect mortgage rates to react to sentiment surrounding US-China trade talks and technical trading patterns.
From a technical perspective the yield on the US 10-year treasury note is currently trading at 1.711% which is below several layers of importance. If yields can close below this level and follow through tomorrow then I expect rates to drift lower.
Current Outlook: floating