Over the past week, events outside the U.S. caused global bond yields to move higher. The U.S. economic data had little impact. As a result, mortgage rates ended the week at the highest levels since the middle of June before the UK voted to exit the European Union.

On Thursday, a burst of news from Europe and Japan was negative for global bonds. In the UK, third quarter GDP growth was stronger than expected, and Spain's unemployment rate declined more than expected. An official from the European Central Bank (ECB) then reminded investors that the ECB will decide whether to extend its bond purchase program at its next meeting on December 8. Given the better than expected European data, concerns grew that the ECB may provide less stimulus. In addition, an official of the Bank of Japan (BOJ) said that the BOJ may not increase its bond purchase program. Bond purchases from central banks around the world have helped push global bond yields lower in recent years, so indications that there may be less stimulus in the future caused yields to rise, including U.S. mortgage rates.

The first estimate for third quarter Gross Domestic Product (GDP), the broadest measure of economic activity, was considerably stronger than other recent readings. After three straight quarters below 2.0%, GDP grew 2.9% during the third quarter of 2016, above the consensus of 2.5%, and up from 1.4% during the second quarter.

Strength was seen in exports and inventory levels. On the negative side for the economy, consumer spending grew at a slower pace than in the second quarter. The report caused some volatility for mortgage rates but had little net effect.

Looking ahead, next week will be packed with central bank meetings and economic reports. The Core PCE price index, the inflation indicator favored by the Fed, will be released on Monday. On Tuesday, ISM Manufacturing will come out and a Bank of Japan meeting will take place. A U.S. Fed meeting will take place on Wednesday, but no significant change in policy or in guidance is expected. Finally, the important monthly Employment report will be released on Friday. As usual, this data on the number of jobs, the unemployment rate, and wage inflation will be the most highly anticipated economic data of the month.