Jan 17th, 2015
Monday's pricing opened even stronger than last Friday but it looks like we are ending the week in a similar position as last Friday. These are still 20 plus month lows in rates. While I usually try to keep my market commentary short and sweet there is a lot going on that effects our market.
The Federal Open Market Committee (FOMC) will vote at the end of the month to begin increasing interest rates sometimes this year.
- While we were hoping to see a rise in wages, reports have come out showing the opposite, wages have been going down. Until we see a rise in wages we do not have the big indicator we are waiting for that shows our economic recovery.
- Europe always has a connection to bonds, usually the more turmoil in Europe the better it is for US bonds (which means lower interest rates):
- The biggest news of the week was the Swiss National Bank reversed its policy of capping the Franc's value vs the Euro in reaction to the European Central Banks inevitable move to implementing Quantitative Easing (QE). The Swiss Franc was where wealthy people held their money and in seconds people lost up to 40% of their money in the bank!
- This sent the Euro to new 9 year lows. For the most part, lower Euros correlate with lower bond yields.
- Greece financial troubles again are coming onto the main stage, TBD after elections
Thank you for your support and have a great weekend!
Trident Mortgage Company
109 34th Street
Ocean City, NJ 08226