Brutal Day And For The Scariest Reasons Despite a slightly stronger start and initial promise of resilience in the face of higher oil prices, bonds bounced nauseatingly higher starting around 10am. Oil prices do a fairly terrible job of explaining the bond weakness, even though oil moved a few bucks higher throughout the day. So what moved markets? That's the scary part: there was no obvious intraday catalyst. The fact is that a lot of traders have decided to sell a lot of bonds very quickly. As obvious as that sounds, we're referring to a staggering uptick in volume as well as average volume…
More than a few media outlets will tell you that 30yr fixed mortgage rates are just now moving over 7% based on the fact that Freddie Mac's weekly rate survey hit 7.03%, up from 6.95% last week. Before continuing, let's be clear that Freddie's weekly rates are a valuable resource for long-term, big picture analysis. But the survey is not an ideal tool to keep track of where rates are on any given day. There are a few reasons for this, but the easiest to understand is that today's update from Freddie is calculated from an average of rates seen between last Wednesday and yesterday. In…
When in doubt, hold a conference. It is an aging group of attendees… exhibitors’ displays and giveaways tell the tale. Frisbees have been replaced with reading glasses. Golf balls by nail files and hangover remedy pouches. MBA cut its 2027 forecast to $2.101 trillion; $634 billion is what the Mortgage Bankers Association now expects Americans to refinance in all of 2027. What’s new out there? At the ACUMA event, I had a chance to spend some time with Kent Staudmyer with NFP Property & Casualty Services, Inc.. Home equity is a big growth area, and NFP provides a credit enhancement for Home…
Let's not get too excited. After all, today's yields are the second highest in 19 years, but still... this morning's price action is better than a sharp stick in the eye. Bonds held almost perfectly flat in the overnight session and Fed rate expectations tempered yesterday's exuberance a bit (hence, 2yr yields are down 3-4bps more than 10yr yields). The refreshing part is that we're seeing modest gains despite oil prices being a few bucks higher. In other words, oil gave bonds an excuse to keep losing ground this morning, but instead, we're modestly stronger. None of today's data has the same…
Why Bonds Sold Off So Severely Today The only number higher than the amount of bonds sold today is the number of people rushing to judgment about "WHY." It wasn't a diesel export ban (or lack thereof), higher oil prices, or the 5yr Treasury auction (see today's recap video if need proof). The initial pop at 9:45am was entirely driven by S&P PMI data. A majority of the selling since then has occurred in stunningly linear fashion without any "event risk" volume spikes. It has also largely tracked with stock losses. This is exactly what it looks like when a big outlier in econ…
The day began like many others over the past several weeks. Bonds hadn't moved much overnight, but were paying some attention to slightly higher oil prices. 10yr Treasury yields were still in the familiar September range between 4.93% and 5.01%, and there was limited economic data on tap that threatened to upset the apple cart. Now let's talk about tail risk. It refers to a distribution of potential outcomes for something that can be reasonably forecasted with a margin of error. A vast majority of the outcomes fall in the main body of the parabolic distribution, but occasionally, an outcome…
“I won the lottery for a million dollars yesterday, so I decided to donate a quarter of it to charity. I now have $999,999.75.” One can make jokes about charities, or about people and companies in residential lending, but giving (and charity) is serious, and helps us keep our focus on things that matter: people in need. For example, there’s Fairway Independent’s Fairway Cares and contribution to the American Warrior Initiative (AWI). UHM… Several years ago, Southwest General Health Center received a $1.25 million donation from The Cosgrove Family Foundation to support the hospital's Maternity…
Bonds lost ground overnight with rising oil prices correlating very well with the higher yields. The selling was minimal and yields remained range bound until roughly 945am ET. While there was slight additional pressure from another little pop in oil prices, the main bad actor was a surprisingly strong reading in S&P PMI data. This series typically goes unnoticed unless it wildly beats/misses forecasts. This morning's results were on the wild side with both services and manufacturing hitting the highest levels in years. Bonds reacted immediately with 10yr yields jumping from 5.0% to over…
Bonds Bounce Back After Mid-Day Stumble Bonds began the day in stronger territory following overnight reports of regarding a potential reopening of the Strait of Hormuz. Yields and oil prices moved steadily higher after that, ultimately rising into negative territory following Trump's UN speech. Subsequent newswires pushed back in the other direction. These involved claims of contact between the U.S. and the Iranian delegation on the sidelines of the UN general assembly as well as Trump comments regarding momentum toward a deal. None of the above was sweeping or definitive, but it was enough…
Mortgage rates didn't move much on Tuesday, but at least it was in the right direction. Perhaps more exciting is the fact that the average lender is now at the lowest levels in a week with top-tier 30yr fixed rates at 7.17% versus 7.19% yesterday. This matches September 14th's rates. Before that, you'd have to go back to January, 2025 to see anything higher. Motivation came from familiar sources as oil prices moved lower after overnight headlines regarding a potential reopening of the Strait of Hormuz. There was a bit of a pull-back intraday but oil and bond yields moved back down in…
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