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9th January, 26
Wild Ride For MBS as Traders Digest New Developments
Wild Ride For MBS as Traders Digest New Developments We may have been looking to the jobs report as this week's biggest potential source of volatility, but that changed on Thursday afternoon after Trump's $200bln MBS buying announcement. Treasuries have only been able to watch from the sidelines. At one point this morning after the jobs data, Treasuries were several bps weaker while MBS were in the midst of their biggest rally in months (up more than a half point at the time). There was a rapid "distribution" phase following the initial rally, but prices bounced back to end the day up about a
Wild Ride For MBS as Traders Digest New Developments
Wild Ride For MBS as Traders Digest New Developments We may have been looking to the jobs report as this week's biggest potential source of volatility, but that changed on Thursday afternoon after Trump's $200bln MBS buying announcement. Treasuries have only been able to watch from the sidelines. At one point this morning after the jobs data, Treasuries were several bps weaker while MBS were in the midst of their biggest rally in months (up more than a half point at the time). There was a rapid "distribution" phase following the initial rally, but prices bounced back to end the day up about a
9th January, 26
Rates Plummet to 3 Year Lows, But There Are Caveats
On a week where the mortgage market was most likely to experience volatility due to Friday's jobs report, Thursday afternoon's surprise announcement of $200bln in GSE MBS (mortgage-backed securities) buying stole the show. This was already juicing the underlying MBS market yesterday afternoon, but traders took the surge to the next level this morning. This matters because MBS dictate mortgage rates. When MBS are rising/improving/surging/etc., it implies lower rates. MBS had improved so much this morning that the average lender released their best rate sheet since Feb 2, 2023--the lowest
Rates Plummet to 3 Year Lows, But There Are Caveats
On a week where the mortgage market was most likely to experience volatility due to Friday's jobs report, Thursday afternoon's surprise announcement of $200bln in GSE MBS (mortgage-backed securities) buying stole the show. This was already juicing the underlying MBS market yesterday afternoon, but traders took the surge to the next level this morning. This matters because MBS dictate mortgage rates. When MBS are rising/improving/surging/etc., it implies lower rates. MBS had improved so much this morning that the average lender released their best rate sheet since Feb 2, 2023--the lowest
9th January, 26
What's Up With The New MBS Buying Announcement and The Massive Reaction in The Market?
On Thursday afternoon with less than an hour left to trade, Trump announced he would be directing his representatives to buy $200bln in mortgage-backed securities (MBS). No matter what one's personal opinions may be regarding bold announcements from the President, this one is definitely serious. How do we know? First off, if you don't want to apply any critical thought to the matter, simply consider that the MBS market reacted immediately and forcefully. In other words, traders have done the mental heavy lifting for you. They wouldn't have been moving billions of dollars of MBS at
What's Up With The New MBS Buying Announcement and The Massive Reaction in The Market?
On Thursday afternoon with less than an hour left to trade, Trump announced he would be directing his representatives to buy $200bln in mortgage-backed securities (MBS). No matter what one's personal opinions may be regarding bold announcements from the President, this one is definitely serious. How do we know? First off, if you don't want to apply any critical thought to the matter, simply consider that the MBS market reacted immediately and forcefully. In other words, traders have done the mental heavy lifting for you. They wouldn't have been moving billions of dollars of MBS at
9th January, 26
PHH Webinar Series; Agencies to Buy One Month's Worth of Production - Similar to 2020; In-Person Events for 2026
A frequent topic in this Commentary is how lenders are responsible for only a small portion of the affordability issue. A big hit to affordability is insurance, and thank you to Kevin K. for passing along this story focused on fire resilience and home upgrades and how they may address insurance costs. Trying to plan for natural events is a full-time job that occupies many, as is thinking about the future of technology. On today’s Last Word presented by TRUE at 1PM ET, Brian Vieaux, Courtney Thompson, and Kevin Peranio break down a busy week across mortgage and capital markets, including hot
PHH Webinar Series; Agencies to Buy One Month's Worth of Production - Similar to 2020; In-Person Events for 2026
A frequent topic in this Commentary is how lenders are responsible for only a small portion of the affordability issue. A big hit to affordability is insurance, and thank you to Kevin K. for passing along this story focused on fire resilience and home upgrades and how they may address insurance costs. Trying to plan for natural events is a full-time job that occupies many, as is thinking about the future of technology. On today’s Last Word presented by TRUE at 1PM ET, Brian Vieaux, Courtney Thompson, and Kevin Peranio break down a busy week across mortgage and capital markets, including hot
9th January, 26
Fairly Tame Jobs Report, MBS Have Magic Armor Either Way
The jobs report came out mixed with payrolls falling 10k short of the 60k forecast and the unemployment rate ticking down to 4.4% vs a 4.5% forecast. The unemployment rate decline is mitigated somewhat by the decline in labor force participation. All in all, this is not a lopsided report with any chance of sparking a rapid move in bonds. That said, MBS are moving rapidly higher and it has nothing to do with data and everything to do with last night's announcement of the administration's plans to buy $200bln in MBS. Simply put, Treasuries are roughly unchanged while MBS are up
Fairly Tame Jobs Report, MBS Have Magic Armor Either Way
The jobs report came out mixed with payrolls falling 10k short of the 60k forecast and the unemployment rate ticking down to 4.4% vs a 4.5% forecast. The unemployment rate decline is mitigated somewhat by the decline in labor force participation. All in all, this is not a lopsided report with any chance of sparking a rapid move in bonds. That said, MBS are moving rapidly higher and it has nothing to do with data and everything to do with last night's announcement of the administration's plans to buy $200bln in MBS. Simply put, Treasuries are roughly unchanged while MBS are up
8th January, 26
Mostly Quiet Ahead of Friday's Jobs Report
Mostly Quiet Ahead of Friday's Jobs Report Bonds lost a bit of ground on Thursday with most of the weakness seen in the overnight session in sympathy with European bond market weakness. The rest of the selling followed a stronger weekly jobless claims report. That said, we wouldn't give the data all the credit based on the timing of the selling and additional back-and-forth throughout the day. Tomorrow is far more interesting anyway. It brings what many view as the first clean reading of the big jobs report since before the government shutdown. Point being: the market will likely be more
Mostly Quiet Ahead of Friday's Jobs Report
Mostly Quiet Ahead of Friday's Jobs Report Bonds lost a bit of ground on Thursday with most of the weakness seen in the overnight session in sympathy with European bond market weakness. The rest of the selling followed a stronger weekly jobless claims report. That said, we wouldn't give the data all the credit based on the timing of the selling and additional back-and-forth throughout the day. Tomorrow is far more interesting anyway. It brings what many view as the first clean reading of the big jobs report since before the government shutdown. Point being: the market will likely be more
8th January, 26
Mortgage Rates Modestly Higher on Thursday. Friday's Risks Are Bigger
Mortgage rates were just a hair higher for the average lender on Thursday. The underlying bond market lost some ground following a stronger weekly Jobless Claims report and in sympathy with global bond market weakness overnight. Because rates are based on bonds, when bonds are weaker, rates move higher. There are many different economic reports that deal with the jobs market, but none more important than the Employment Situation released by the Bureau of Labor Statistics--the one typically referred to simply as "the jobs report." This month's jobs report will be released at 8:30am
Mortgage Rates Modestly Higher on Thursday. Friday's Risks Are Bigger
Mortgage rates were just a hair higher for the average lender on Thursday. The underlying bond market lost some ground following a stronger weekly Jobless Claims report and in sympathy with global bond market weakness overnight. Because rates are based on bonds, when bonds are weaker, rates move higher. There are many different economic reports that deal with the jobs market, but none more important than the Employment Situation released by the Bureau of Labor Statistics--the one typically referred to simply as "the jobs report." This month's jobs report will be released at 8:30am
8th January, 26
Hedging, PPE, Commercial, ATM Products; Trump vs. Institutional SFH Buyers; Prepayment Numbers
“Warning: don’t use your pet’s name for your password. We were hacked, and had to change our dog’s name.” “Experts” are saying that passwords will be on the way out in 2026 as passkeys take over. Good, as I am tired of carrying around a notebook with my usernames and passwords for dozens of sites. For fans of artificial intelligence (AI), we have news that a) AI generated weather predictions are making up new towns, and b) Utah is allowing AI to prescribe medicine to humans. (Taking that to an extreme, is sure sounds like the plot of a sci fi movie where us humans are unwitting
Hedging, PPE, Commercial, ATM Products; Trump vs. Institutional SFH Buyers; Prepayment Numbers
“Warning: don’t use your pet’s name for your password. We were hacked, and had to change our dog’s name.” “Experts” are saying that passwords will be on the way out in 2026 as passkeys take over. Good, as I am tired of carrying around a notebook with my usernames and passwords for dozens of sites. For fans of artificial intelligence (AI), we have news that a) AI generated weather predictions are making up new towns, and b) Utah is allowing AI to prescribe medicine to humans. (Taking that to an extreme, is sure sounds like the plot of a sci fi movie where us humans are unwitting
8th January, 26
No Help From Jobless Claims or Europe
US bonds have been taking clear cues from Europe in overnight trading recently. Today's example involved a 3bp sell-off on both sides of the Atlantic. The 8:30am Jobless Claims data may be garnering more volume, but it has only added modestly to the morning's selling pressure so far.
No Help From Jobless Claims or Europe
US bonds have been taking clear cues from Europe in overnight trading recently. Today's example involved a 3bp sell-off on both sides of the Atlantic. The 8:30am Jobless Claims data may be garnering more volume, but it has only added modestly to the morning's selling pressure so far.
7th January, 26
Ultimately Underwhelming Despite Seemingly Significant Data
Ultimately Underwhelming Despite Seemingly Significant Data There was certainly the potential for volatility today with the confluence of ADP, ISM, and Job Openings data. But the results ended up being close enough to consensus to obviate any massive reactions. Yields hit their lowest levels in a week after ADP came in slightly softer, but most of the rally was already in place from the overnight session. Stronger ISM and job openings pushed bonds back in the other direction, but not enough to result in bond market losses or negative reprices. Econ Data / Events ADP Employment 41k vs 47k
Ultimately Underwhelming Despite Seemingly Significant Data
Ultimately Underwhelming Despite Seemingly Significant Data There was certainly the potential for volatility today with the confluence of ADP, ISM, and Job Openings data. But the results ended up being close enough to consensus to obviate any massive reactions. Yields hit their lowest levels in a week after ADP came in slightly softer, but most of the rally was already in place from the overnight session. Stronger ISM and job openings pushed bonds back in the other direction, but not enough to result in bond market losses or negative reprices. Econ Data / Events ADP Employment 41k vs 47k