27 Apr North and South Korea End 65 Year Dispute
Economic reports of the morning came in hotter than expected. However, the bond market is trading based on the technical outlook, so rates are holding steady in early morning trading. Most importantly, GDP estimates for the first quarter of 2018 came
in showing an annualized rate of growth of 2.3%, which was much stronger than the 2% anticipated. The stronger than expected number comes at a quarter that is usually on the lower end of the quarters of each year. Therefore, we could easily see GDP reports come in even stronger as the quarters progress. This is generally not good news for mortgage interest rates. However, with yields hitting four year highs on the 10 Year Treasury Note, mortgage interest rates have strong support at current levels. Therefore, they are holding steady.
News of the Korean War ending after a 65 year running history is helping the stock market, as investors see the odds of political instability reducing as a result. Although this could be a short lived agreement, the North and South sides of the Korean region appear unified. I was in South Korea yesterday and witnessed celebration as news of the agreement sunk in to the citizens who can now breath a sigh of relief. At least for now.
In spite of the strong economic news, mortgage bonds are holding at the moment. Although there is no need to immediately lock, there is limited benefit to floating an interest rate.