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Rates Increase on Mostly Strong Economic Data

| Friday, October 7th, 2016 | Comments Off on Rates Increase on Mostly Strong Economic Data

Mortgage interest rates increased this past week as economic data that was mostly stronger than expected. Economic data stronger than expected included the ISM Manufacturing Index, Crude Oil Inventories falling by only half of expected declines, Jobless Claims, Factory Orders and The ISM Non-manufacturing Index. Economic data weaker than expected included the International Trade Deficit, Non-farm Payrolls and Construction spending which fell in both single family housing and commercial. A pre-election rate hike is looking very unlikely after a relatively soft employment report that showed earnings to be underwhelming and not inflationary by any measure. Chair Yellen will give a speech next Friday, the topic being “The Elusive Recovery”, a title that doesn’t sound as though we will get a definitive answer on the next rate hike.

The Dow Jones Industrial Average is currently at 18,267, up about 65 points on the week. The crude oil spot price is currently at $49.77 per barrel, up over $1 per barrel as prices quickly recovered after the drop from the announced OPEC production cuts. The Dollar strengthened versus the Euro and weakened versus the Yen on the week.

Next week look toward Tuesday’s NFIB Small Business Optimism Index; Wednesday’s MBA Mortgage Applications, JOLTS Report and FOMC Minutes; Thursday’s Jobless Claims, Import/Export Prices, EIA Petroleum Status Report and the Treasury Budget; and Friday’s Production Price Index, Retails Sales, Consumer Sentiment and Fed Chair Yellen’s speech as potential market moving events.

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