Mortgage Rates Increase on Inflation Expectations

Mortgage interest rates increased this past week on increased inflation expectations. Commodity prices have moved higher as the economic outlook has improved. Economic data was mixed. Economic data stronger than expected included March Retail Sales, March Housing Starts and Building Permits, and the April Philadelphia Fed Business Index. Economic data weaker than expected included the New York Empire State Manufacturing Index, the April NAHB Housing Market Index, and Weekly Jobless Claims. February Business Inventories, March Capacity Utilization, and March Leading Economic Indicators were in line with expectations. Global tensions have subsided recently as it appears that the U.S. and North Korea will meet in June at a summit for the first time in 30 years. The European Central Bank may remove its current stimulus and increase its benchmark rate. Corporate earnings are now the focus of equity markets with strong earnings expected.

The Dow Jones Industrial Average is currently at 24,527, up about 160 points on the week. The crude oil spot price is currently at $67.90 per barrel, up slightly on the week. The Dollar strengthened versus the Euro and Yen on the week.

Next week look toward Monday’s PMI Composite Flash and Existing Home Sales, Tuesday’s Case-Shiller Home Price Index, FHFA House Price Index, New Home Sales, and Consumer Confidence Index, Thursday’s Durable Goods Orders, International Trade, and Jobless Claims, and Friday’s first look at Q1 GDP, Employment Cost Index, Chicago Purchasing Managers Index, and Consumer Sentiment Index as potential market moving events.