How do we (mortgage brokers) know rates are going up?

Hi All – many people ask how we know that rates are going to change ahead of time. Below is a sample of the data that we read on a daily basis. If you were motivated enough to read things like this every day – or figure them out for yourself – then you would know too. Or, just let a mortgage broker do it.

MARKET COMMENTS

Bond yields today are roughly where they were a week ago but there has been plenty of volatility over the intervening period.

Last week yields were pushed higher by in-line or better than expected economic data in Canada (Manufacturing Sales Growth, Trade Balance) and the US (Retail Sales Growth, Initial and Continuing Jobless Claims, Trade Balance), together with a sense of optimism that the European debt crisis will be resolved and/or that concerted steps there would be taken to protect the banking system.

Generally speaking, “good” economic news tends to push bond yields higher as market participants are less interested in the safety bonds provide.

Notwithstanding last week’s developments, yields have come back down today as worse than expected economic data in the US and a clarification from Germany that a once-and-for-all solution to Europe’s debt crisis will not be forthcoming and that markets should expect such crisis to extend into next year.

In all, these developments present the global economy in better shape than what we thought at the start of the week, and the rise in rates reflects that change.