New Zealand raised their equivalent of their federal fund rates today over concerns of rapid economic growth (a nice way of describing inflation). The increase caught the market by surprise and it is affecting bonds across the world (including US mortgage bonds). Initial Jobless Claims came in slightly under predictions so it looks like it will be a bumpy day today. Bonds are currently down 41 basis points this morning so mortgage interest rates should continue their four week climb.
I write something nice about the Kiwis last night and then they shock the world bond market. On Friday the Balance of Trade will be released at 8:30 AM which should not have a major impact on the mortgage bonds. Next week there are some key economic reports scheduled which could help reverse the steady climb in rates.
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