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ECB Hints at More Stimulus
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Increased expectations for additional stimulus in Europe were positive for mortgage rates over the past week. The economic data and the Fed Minutes had little impact. Mortgage rates ended the week a little lower.
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While Wednesday's Minutes from the October 28 Fed meeting caused little reaction, the Minutes from the October 22 European Central Bank (ECB) meeting released on Thursday revealed a likely need for additional stimulus to boost the economies in the region. Investors raised their expectations that the ECB will announce an expansion of its bond buying program at its next meeting on December 3. Added demand from the ECB would lower bond yields around the world, including U.S. mortgage-backed securities (MBS). Mortgage rates fell a little on the possibility.
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The housing sector data released over the past week revealed small declines, but this was mostly due to multi-family activity. Single-family housing starts remained near the best levels of the year. Single-family building permits, a leading indicator of future activity, rose to the highest level since December 2007. The NAHB Housing Index showed that home builder confidence dipped slightly in November from the multi-year highs seen in October.
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Next week, Existing Home Sales will be released on Monday. The second estimate for third quarter GDP will come out on Tuesday. Wednesday will be a packed day ahead of Thanksgiving with Durable Orders, New Home Sales, Personal Income, and the core PCE price index. Core PCE is the Fed's preferred inflation indicator. In addition, there will be Treasury auctions on Monday, Tuesday, and Wednesday. Mortgage markets will be closed on Thursday and will close early on Friday in observance of Thanksgiving.
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All material Copyright © Ress No. 1, LTD (DBA MBSQuoteline) and may not be reproduced without permission.
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All material Copyright © Ress No. 1, LTD (DBA MBSQuoteline) and may not be reproduced without permission.
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