Market recap for week ending 8/10/2012
This week has been a bad week for mortgage rates. As of this morning mortgage rates are approximately 0.125% higher than they were on Monday.
The main reason for the climb in interest rates this week has been that European leaders are continuing to work through their debt problems. Their problems are far from over, but the fact that they are working to resolving them is increasing investors’ confidence and money is flowing out of safe haven investment such as US Treasury bonds into higher risk investments. When investors are flocking to US Treasuries there is more money competing for investments which drives rates down. Now that there is less money competing for these “safe investments” rates are staring to creep back up.
In other rate related news we saw some bad economic reports out of China, Germany, and France this week which is confirming that the Global economy is slowing. The fact that the Global economy is slowing is actually good news for rates but it was overshadowed by the positive news out of Europe.
Next week as usual all eyes and ears will be on Europe and investors will be watching on how they progress or regress with their debt crisis solution.
Tags: Europe debt crisis, market preview, mortgage rates outlook