Markets Improve on Hopes of a Definitive War Timeline

Happy Good Friday from Local Mortgage!

It was a better week for mortgage rates as we improved a bit back to 6.25% for our best 30-year fixed conventional scenario. All four full days of trading this week were positive for mortgage rates as markets responded early in the week to news of a potential de-escalation in the Iran war.

It appears that bond markets traded more heavily on political commentary regarding a finite timeline for Iran and less on actual economic news. Mortgage rates finally broke their correlation with oil prices this week, as the market improved despite another 10% increase in oil. Wednesday’s manufacturing index showed an increase to the highest level since 2022 and Friday’s employment report was much stronger than expected, adding 178,000 jobs in March. The big jobs gain would likely have had more of an impact if last month’s reading wasn’t abnormally low, it appears most investors are calling the last two months’ jobs reports a wash.

Next week, investors will continue to focus on the middle east as that is the main market force at present. For economic news, we will get last month’s FED minutes on Wednesday, and inflation data on Thursday and Friday with PCE and CPI reports.

Hope everyone has a great Easter weekend. Thank you for reading.