On strength in jobs and hiring, mortgage rates finished last week at their highest levels in six weeks.
It was a slow week last week until Friday when — with the stock market closed for Good Friday and with most bond traders on early vacation — the Non-Farms Payroll report handily beat expectations.
This created a ton of doubt with economists about whether our economy is speeding up instead of slowing down.
When the economy speeds up, it tends to erode the value of the dollar and that forces mortgage rates higher because mortgages are “paid” in dollars. If the dollar is weaker, investors will demand more dollars in return for every dollar they invest.
The stock market re-opened this morning and now momentum trading is continuing to push mortgage rates higher.
This week is practically devoid of economic data until Friday’s PPI data. So, until then, expect a lot of discussion around Wednesday’s minutes release from the March FOMC meeting.
The jobs data from last Friday whiplashed investors that were predicting a slowdown so these folks will be looking for clues about the Fed’s next move. There may be rate volatility surrounding the release.