Friday morning saw U.S. Bonds rally on both a lower than expected May Consumer Sentiment Report (88.6 vs. 96.0), and May Empire Manufacturing Index (3.1 vs. 4.5 expected). The rally in bonds this morning is a welcomed relief and comes after another tough week for bonds which saw the 10-year Treasury reach 2.29% mid-week escalating sentiment that the super low rate environment could be in jeopardy.
Globally, the European Central Bank reassured markets that the ECB’s asset purchase program will continue until inflation reaches 2%. These “dovish” comments aided in Friday’s morning bond rally in the U.S.(remember the world is so interconnected today).
On the housing front, online real estate firm Redfin reported Thursday that home sales across the market rose at a rate of 5.40% from April 2014 to April 2015. This is a positive sign for real estate brokers and mortgage originators.
Due to continued volatility, we recommend cautiously floating interest rates with a biased toward locking.