Southern Data Sends Yields South

The US employment report was just released, and hiring is slowing down in the US. Total new jobs created came in at 175,000, much lower than the expected number of 240,000. The unemployment rate held at 3.8%.

Coming off Jerome Powell’s conference yesterday where he confirmed that the US Fed’s next move WON’T be a raise in interest rates, we are seeing bonds pick up, and yields come down on both sides of the border.

Canada won’t release April employment numbers until next Friday, but the US impacts are still helping government yields trickle down. The Canadian 5 year is around 3.75%, and appears to be floating in a nice range range right now. Of course, any piece of data that comes in well above or below expectations has the ability to change the yield range right now.

In the next few weeks we are gonna get a lot of data on employment, inflation, and economic indicators. If you have clients shopping, make sure you get a pre approval in to hold rates, and make sure the lender you are choosing to go with has generous rate drop policies.

We are at a point in the cycle where rates could go way up, or come way down – or perhaps both in a 120 rate hold cycle, so make sure the lender you choose will allow multiple rate drops between now and closing. Markets are going to be hypse sensitive to every single number released ,and this has the potential to make yields like a roller coaster. I would hate a client to be sitting with a pre approval at a lender that doesn’t give rate drops every time rates fall, and I would also hate to see you not send in a pre approval thinking rates would come down – only to have data run rates back up.