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22nd July, 24
Mid-Day Mystery Move But no Impact on Bigger Picture
Mid-Day Mystery Move But no Impact on Bigger Picture The most notable development in the bond market today was the fairly abrupt (but still small-scale) sell off that took place between 11:20am and noon ET.  Oftentimes, there are at least a few reasonable options to serve as scapegoats for otherwise inexplicable market movement, but that's arguably not the case this time around.  Is it political? If so, why did the market wait until 11:20am?  Is it related to other markets?  Stocks also sold off at the time, but they rallied back whereas bonds did not.  Europe? 
22nd July, 24
Mortgage Rates Remain Unchanged to Start The Week
Mortgage rates rose at a moderately quick pace on Friday, partially in response bond market weakness on Thursday afternoon that happened too late in the day for many lenders to update their offerings.  To be fair, it was only "moderately quick" relative to the subdued volatility seen during the rest of the week.   The new week is off to the same sort of subdued start with the average lender holding right in line with the levels seen on Friday.  Political developments over the weekend had no discernible impact on the rate landscape in the short term, no matter how often
22nd July, 24
Fraud Prevention Report, HELOC, LO Awareness, DSCR Products Biden’s impact on Markets
No way, President Biden decided to drop out of the presidential race on National Ice Cream Day! The markets (take your pick… stock, bond, currency, whatever) don’t like uncertainty. Fixed-income markets, including those that involve mortgage-backed securities, generally sell off price-wise and go up rate-wise with uncertainty. With President Joe Biden announcing that he will not run for re-election in November, there is added uncertainty. Kamala Harris is not a shoo-in to be the nominee although, as of this writing, other Democrats are coming out saying they will not challenge her. And of
22nd July, 24
Total and Complete Absence of a Reaction to Biden Bowing Out
If there was any remaining doubt that recent political headlines were given too much credit for impacting the bond market, it was removed late Sunday night.  When Treasury trading began for the week, investors finally had a chance to react to the first non-speculative major development in the Trump vs Biden election odds debate--the one that kicked into high gear after the presidential debate.   This is the moment of the week that has historically seen big gluts of volume and volatility when over-the-weekend events are truly newsworthy.  In the current case, there was no
19th July, 24
Super Duper Flat After Overnight Losses
Super Duper Flat After Overnight Losses In a vacuum limited to this week, Friday ended up being the only interesting day because it was the only outlier in terms of bond market price action.  On the previous 4 days, the highest MBS price was within a 0.09 range and the lowest price was within a 0.06 range. Lastly, the widest high/low range of the week was about a quarter point.  If you're not sure what to make of that, it means Mon-Thu were flat.  Friday was flat too, but only after overnight losses took MBS prices almost a half point below Thursday's highs.  In the bigger
19th July, 24
Mortgage Rates Jump to Highest Levels of The Week
While there was never much of a chance of mortgage rates moving above the levels seen at the beginning of last week, they were easily able to nab the dubious distinction of hitting this week's highest levels today. This is the least surprising thing imaginable after looking at this week's chart of mortgage-backed securities prices. As the caption advises, the lower the line, the higher the implication for mortgage rates.  The weakness was already in the works as of yesterday afternoon, but the market deteriorated further overnight and in the early morning hours for reasons that are
19th July, 24
VOE, Home Equity, MERS Audit Products, Builder Applications
I get asked if I think our industry puts too much emphasis on what the Federal Reserve is doing, and its being able to control inflation. In a word, my answer is yes. The Fed has a hand in inflation, but it isn’t the whole story. A President cuts off immigrants, so labor costs for picking lettuce or building a house go up. A ship carrying a load of raw materials from Africa is taken over by pirates, or gets stuck due to a port strike in a foreign nation. Tariffs are implemented, raising the prices since average consumers pay entirely for higher tariffs. Crops like corn or oats have a bad
19th July, 24
Lower Volume And Corporate Bond Issuance Pushing Yields Higher
This week's bond rally hit a wall at the 3pm close on Wednesday.  There's been gradual upward pressure since then with today's overnight session seeing some of the fastest selling.  The counterpoint is that the selling is only fast relative to the recent range.  It's very mild in the bigger picture with 10yr yields only being up about 4bps. As for motivations, declining volumes have greased the skids for any material market movers to have a bigger impact than they otherwise might.  One of the only quantifiable market movers has been the heavy slate of corporate bond
18th July, 24
Morning Volatility, Afternoon Drift
Morning Volatility, Afternoon Drift Bonds began the day in modestly weaker territory before undergoing a bit of volatility after the morning economic data.  The two reports in question were Jobless Claims, which voted in favor of lower yields, and the Philly Fed Index, which made the opposite case. Bonds wend both ways before the bulls ultimately took control and got yields back to unchanged levels just before 11am.  After that, it was a slow grind to the weakest levels of the day, but all of the above played out in a range that was just as narrow as the last few days. Econ Data /
18th July, 24
Mortgage Rates Didn't Actually Move Sharply Lower Today
Thursday's mark the release of Freddie Mac's weekly mortgage rate survey.  It's the longest running and most widely cited measure of mortgage rates, but it's not always the most accurate when it comes to tracking day to day changes. In today's case, the survey showed a sharp drop from 6.89 to 6.77.  In actuality, the drop was a bit bigger than that, but it happened last week following Thursday's Consumer Price Index (CPI).  Today's rates are almost perfectly unchanged since the end of last week. At issue is Freddie's methodology which reports a trailing 5 day average of rates