http://www.mortgagenewsdaily.com/topic/mbs Mortgage Rates Blog https://www.mortgagenewsdaily.com/markets/mbs-morning-07012026 Wed, 01 Jul 2026 13:28:47 GMT 6a4524a4a6791958c52c9b0d Matthew Graham Bonds have added modestly to Tuesday's big quarter-end sell-off (a phenomenon that has nothing to do with the sorts of fundamental developments that dictate a vast majority of market movement). Thankfully, the random plumbing-related volatility is behind us as we begin the new quarter. Old-school potential volatility awaits. The morning's first order of business will be to see if Warsh says anything interesting at the SINTRA conference. After that, ISM Manufacturing data at 10am is a B+ market mover if it falls far enough from expectations.  Mortgage News Daily 0 http://www.mortgagenewsdaily.com/rss/mbs https://www.mortgagenewsdaily.com/markets/mbs-recap-06302026 Tue, 30 Jun 2026 19:59:16 GMT 6a442e8ca6791958c52aee14 Matthew Graham Why We Saw Steady Selling All Day We expected volatility would pick up on Tuesday for one reason or another and it did not disappoint. Sadly, the direction of the movement was disappointing as bonds sold off steadily virtually all day. While there was a bit of selling after the job openings data at 10am ET, the bulk of the weakness is likely due to additional quarter-end position squaring and rebalancing (the same thing that helped bonds last Wednesday). This is mechanical, emotionless, non-reactive trading conducted simply to dial in certain levels of bond holdings to match investment portfolio benchmarks and/or stock/bond allocation percentages. Most of it has already come and gone for Q2, but it doesn't take much to move the needle amid thin summertime volumes. Just the way the ball bounced today... Econ Data / Events Case Shiller Home Prices-20 y/y (Apr) 1.1% vs 0.9% f'cast, 0.8% prev CaseShiller 20 mm nsa (Apr) 1.0% vs -- f'cast, 1% prev FHFA Home Price Index m/m (Apr) -0.1% vs 0.2% f'cast, 0.1% prev FHFA Home Prices y/y (Apr) 2.0% vs -- f'cast, 1.7% prev Chicago PMI 56.7 vs 56.0 f'cast USA JOLTS Job Openings (May) 7.594M vs 7.30M f'cast, 7.618M prev Consumer Confidence 91.2 vs 94.7 f'cast, 93.1 prev Market Movement Recap 08:48 AM Initially stronger overnight with moderate selling just before the open. MBS down 2 ticks (.06) and 10yr up 1.5bps at 4.391 10:16 AM Weaker after JOLTS, but stabilizing now. MBS down an eighth and 10yr up 2.2bps at 4.397 01:47 PM Weakest levels. MBS down 6 ticks (.19) and 10yr up 3.5bps at 4.41 Mortgage News Daily 0 http://www.mortgagenewsdaily.com/rss/mbs https://www.mortgagenewsdaily.com/markets/mbs-morning-06302026 Tue, 30 Jun 2026 13:21:52 GMT 6a43d1f8a6791958c52a3717 Matthew Graham Before looking at trading screens this morning, the first order of business would have been to mention the ramp up in economic calendar activity. While the line item count is respectable, it's really only the 10am Job Openings data that packs enough of a punch to represent any serious volatility risk. Even then, sometimes it hits and sometimes it doesn't. Bonds are starting out slightly weaker thanks to another dash of quarter-end position squaring. It arrived at almost the exact same time as the last Wednesday's installment, but in the form of selling instead of buying. Thankfully, it was a lot smaller and merely added about 2bps to 10yr yields (which remain well under the 4.42% technical level). Mortgage News Daily 0 http://www.mortgagenewsdaily.com/rss/mbs https://www.mortgagenewsdaily.com/markets/mbs-recap-06292026 Mon, 29 Jun 2026 19:25:43 GMT 6a42d4d8a6791958c52881fc Matthew Graham Volatility Risk Ramps Up From Here Monday made it clear that traders are playing by the typical summertime, holiday week rules which often see the first day of the week result in very low volume and volatility. While participation should remain lighter than normal, that's no guaranty of an ongoing absence of volatility. Even if there are fewer traders in the room, they can still move markets if econ data or Fed-speak (Warsh is on the calendar for Wednesday) bring any surprises. We're also interested to see if there are visible shifts that transcend data/news based on the recently outsized role of quarter-end rebalancing trades. Market Movement Recap 08:37 AM Flat overnight with mild selling at 8:20am. 10yr up 1.6bps at 4.383 and MBS down 3 ticks (.09). 12:30 PM 10yr up 1.4bps at 4.381 and MBS down 3 ticks (.09). 03:03 PM 10yr up half a bp at 4.373 and MBS down 1 tick (.03). Mortgage News Daily 0 http://www.mortgagenewsdaily.com/rss/mbs https://www.mortgagenewsdaily.com/markets/mbs-morning-06292026 Mon, 29 Jun 2026 14:24:52 GMT 6a428e88a6791958c527f4b4 Matthew Graham At the risk of jinxing it, Monday is pretty much already in the back as an uneventful start to a holiday-shortened week (early close on Thursday and fully closed on Friday). Bonds were very flat overnight and are near unchanged levels in the first few hours. Unchanged is good in this case as it means we're holding in a friendlier trading range under the 4.42% technical level in 10yr yields. Today is the only data-free day of the week and the next 3 are action-packed by comparison. While we're expecting lower volume than normal due to the time of year and the holiday, this doesn't necessarily mean lower volatility. In fact, light volume often exacerbates volatility if there are big market movers in play (like Thursday's jobs report). We're also open to a bit of extra volatility on the first two days of the week as quarter-end trading wraps up. Mortgage News Daily 0 http://www.mortgagenewsdaily.com/rss/mbs https://www.mortgagenewsdaily.com/markets/mbs-recap-06262026 Fri, 26 Jun 2026 20:51:07 GMT 6a3ef570a6791958c5233557 Matthew Graham Early Gains. Flat Afternoon. MBS Underperform Friday ended up offering a boring conclusion to a week that had at least some measure of excitement on Wednesday. Bonds started a hair stronger, lost ground modestly and then rallied to the day's best levels by noon. From there, 10yr yields went perfectly sideways in an ultra narrow range. MBS managed to hang on to just barely positive levels but gave up about an eighth of a point during the time Treasuries were holding steady. Technically, this is underperformance in a vacuum, but in the bigger picture, MBS have been doing just fine in relative terms. As a reminder, next week is 3.5 days thanks to Independence Day observance, and the jobs report will be on Thursday morning.  Market Movement Recap 09:04 AM Stronger overnight, but bouncing back a bit now. 10yr up 0.3bps and MBS unchanged. 12:04 PM Near strongest levels. MBS up an eighth and 10yr down 1.8bps at 4.373 04:29 PM Off strongest levels in MBS, now up only 2 ticks (.06). 10yr down 1.9bps at 4.372 Mortgage News Daily 0 http://www.mortgagenewsdaily.com/rss/mbs https://www.mortgagenewsdaily.com/markets/mbs-morning-06262026 Fri, 26 Jun 2026 14:01:54 GMT 6a3e9558a6791958c5227b2b Matthew Graham Q2 has been one of the best quarters for stocks going all the way back to the dot com boom, even after the 4-5% pullback in June. This has created a massive quarter-end rebalancing need among money managers and we've seen that random volatility play out in both stocks and bonds over the past few weeks. As the quarter wraps up in the next 3 business days, this could continue to drive volatility, but hopefully/probably less than it did earlier this week. Bonds are starting out roughly unchanged and have little else to focus on thanks to an uneventful economic calendar. Mortgage News Daily 0 http://www.mortgagenewsdaily.com/rss/mbs https://www.mortgagenewsdaily.com/markets/mbs-recap-06252026 Thu, 25 Jun 2026 19:27:01 GMT 6a3d9004a6791958c520ab72 Matthew Graham Mostly Holding Yesterday's Big Gains Bonds began the day in modestly weaker territory, but not weak enough to take 10yr yields above the 4.42% technical level. That was a notable development even before considering subsequent movement. The 8:30am PCE inflation data made room for a friendly reversal with modest losses being replaced by modest improvement. Bonds ultimately weren't able to hang onto the stronger levels seen in the morning with gradual selling in the late AM hours and another little pop of weakness following headlines that Iran had attacked a cargo ship in The Strait (not a U.S. ship, or the reaction would likely have been bigger). Bottom line: today failed to place an exclamation point on yesterday's rally, but it still wasn't a question mark. The only caveat is that quarter-end volatility is still a risk between now and Tuesday. Econ Data / Events Continued Claims (Jun)/13 1821.0K vs 1800K f'cast, 1810K prev Core CapEx (May) 1.6% vs 0.6% f'cast, -1.1% prev Core PCE (m/m) (May) 0.3% vs 0.3% f'cast, 0.2% prev Core PCE (y/y) (May) 3.4% vs 3.4% f'cast, 3.3% prev Durable goods (May) -4.5% vs -4.5% f'cast, 7.9% prev GDPQ1 2.1% vs 1.6% f'cast, 0.5% prev Jobless Claims (Jun)/20 215.0K vs 225K f'cast, 226K prev PCE (y/y) (May) 4.1% vs 4.1% f'cast, 3.8% prev PCE prices (m/m) (May) 0.4% vs 0.5% f'cast, 0.4% prev Market Movement Recap 08:49 AM Decent gains after PCE comes in on target. MBS up 6 ticks (.19) and 10yr down 1.2bps at 4.375 11:00 AM MBS up an eighth and 10yr down just under 1bp at 4.379 01:41 PM MBS still up an eighth but 10yr now down only 0.3bps at 4.384 Mortgage News Daily 0 http://www.mortgagenewsdaily.com/rss/mbs https://www.mortgagenewsdaily.com/markets/mbs-morning-06252026 Thu, 25 Jun 2026 12:59:01 GMT 6a3d349ca6791958c51ff613 Matthew Graham The PCE price index may be a less timely report than CPI/PPI when it comes to measuring inflation in the U.S., but it's more thorough and has stronger implications for Fed policy. Traders were apparently braced for today's number to be a bit hotter. Bonds rallied moderately after core monthly PCE came in as-expected at 0.3%. Annual inflation is running at 4.1% at the headline level, and 3.4% at the core level (both in line with expectations. Bonds were a few bps higher in yield before the data and are now a few bps lower heading into the 9am hour. Mortgage News Daily 0 http://www.mortgagenewsdaily.com/rss/mbs https://www.mortgagenewsdaily.com/markets/mbs-recap-06242026 Wed, 24 Jun 2026 19:52:24 GMT 6a3c4460a6791958c51e4f1c Matthew Graham What's Up With Today's Big Rally? (Spoiler Alert: Quarter-End Rebalancing) Stocks went on a tear in Q2 with the S&P up 20% as recently at June 16th. AI-adjacent stocks were up over 50%. Bonds lost ground over the same time. That means the 60/40 stock/bond portfolio targets were thrown way out of whack, at times approaching a 70/30 balance. Gigantic money managers (insurance/pension funds and foreign investment funds) take the last few weeks of a quarter to get that balance back to 60/40. This is accomplished via selling stocks, buying bonds, or both. In today's case it was both, but primarily the "buying bonds" part. If the math is so cut and dried, why can't the market accurately price it in ahead of time (after all, it was being talked about)? Ultimately, rebalancing flows are only a small fraction of trading volume. For instance, the stock selling in early June was viewed as early rebalancing tradeflows. This stuff doesn't adhere to a set schedule, so it's only truly obvious in hindsight. Unfortunately, it doesn't speak to a material shift in bond buying demand going forward--just an accounting adjustment in response to the past. Econ Data / Events New Home Sales (May) 0.58M vs 0.64M f'cast, 0.622M prev Market Movement Recap 09:20 AM MBS up nearly 3/8ths and 10yr down 6.6bps at 4.432 11:33 AM MBS up nearly half a point and 10yr down 9.1bps at 4.407 02:43 PM MBS up half a point and 10yr down almost 10bps at 4.401 Mortgage News Daily 0 http://www.mortgagenewsdaily.com/rss/mbs