Increased concerns about the conflict in Syria caused investors to shift to safer assets this past week. Mixed economic data was roughly neutral. As a result, mortgage rates ended the week a little lower.
Concerns about the reported use of chemical weapons by the Syrian government and the possibility of increased US involvement has resulted in greater uncertainty in financial markets. Investors reacted by shifting from riskier assets such as stocks to safer assets such as bonds, which helped mortgage rates. It also resulted in higher oil prices. When energy costs rise, economic growth slows, and this also benefits mortgage rates.
The other major focus for investors remains the timing for the Fed to begin to taper its bond purchase program. The economic data released last week was split between positive and negative surprises, however, which provided little reason for investors to change their expectations for Fed policy. The big upside news this week was that second quarter GDP was revised higher from 1.7% to 2.5%. On the downside, the Durable Orders data showed a large decline. Consumer Confidence and Consumer Sentiment increased, while Pending Home Sales fell. All in all, this week's mixed bag of data created volatility for mortgage rates, but it had little net impact.
The big story next this will be Friday's Employment report. As usual, this data on the number of jobs, the Unemployment Rate, and wage inflation will be the most highly anticipated economic data of the month, and it will carry even more weight than normal due to how it will influence Fed policy. Earlier in the week, ISM Manufacturing and Construction Spending will be released on Tuesday. The Fed's Beige Book and the Trade Balance are scheduled for Wednesday. ISM Services, ADP Employment, Productivity, and Factory Orders will come out on Thursday.
On A Side Note: I hoe you and your family had a very happy Labor Day!!
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