• Mortgage rates trended slightly lower this week but are primed to return to multi-year highs following a late rally on encouraging jobs data.

After rates soared to five-year highs in September, borrowers were offered a slight reprieve this week as inflation and manufacturing data releases failed to move the market and analysts continued to absorb the revamped North American trade pact. Furthermore, the several speeches made by Federal Reserve presidents failed to diverge from the Fed’s policy and outlook announced last week.

Markets did react, however briefly, to political tensions overseas. Uncertainty surrounding the Italian government’s commitment to the euro boosted demand for safer assets and caused rates to slide. However, news of a potential resolution – and the release of strong U.S. jobs data – brought the decline to an abrupt end.

Wednesday’s private sector jobs data announcement wouldn’t normally move the market. However, the release greatly deviated from analysts’ expectations, which was enough to nudge rates upward and alter expectations for Friday’s employment report – news that typically carries more weight in the markets. If Friday’s release is in line with Wednesday’s job data, a return to rapid rate increases – and multi-year highs – could be in store.