Three things that can cause rate volatility this week Monday January 6th 2020 Mortgage Update News

Here are 3 things that can move market this week:

1) Geopolitical: All eyes are on Iran/Iraq, and the rest of the Middle East as tensions and threats arise. The long-bond market will likely continue to see an inflow of capital. The markets are also paying close attention to Brexit as the Labour Party (the party that lost the recent election) looks to replace its leader and how that will impact the Brexit proceedings

2)Trade War: Last week saw an announced signing of the "Phase 1" deal for Saturday, then it was moved to January 15th. The markets will be reactive to any real confirmed date.

3) Jobs: Friday's BLS report will get the most attention for the week as far as economic data is concerned. Bond traders will focus the most on the inflationary aspect of the report, which is average hourly earnings. Any reading on a YOY basis above 3.3% would be negative for rates.

The main reason for the move lower in rates is due to the tensions in the Middle East denoted above. Short of a complete de-escalation in tensions between the US and Iran, which of course, is highly unlikely this week, we'll likely see rates stay at these low levels. Market volatility will likely be elevated this week.

Update