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Staggering MBS Outperformance Easing Negative Momentum Pain
Bonds are in the throws of an extended negative momentum move that's been in place throughout October. At times, stimulus-related headlines have accounted for volatility during this move. Today was one of the handful of weaker days for Treasuries, yet MBS are down only 1 tick heading into the end of the day. They've been doing this a lot lately, and it makes it even easier for lenders to avoid raising rates nearly as quickly as the broader bond market suggests.
Econ Data / Events
20min of Fed 30yr UMBS Buying 10am, 1130am (M-F) and 1pm (T-Th)
Jobless Claims 787k vs 860k f'cast, 842k prev
Existing Home Sales 6.54m vs 6.3m f'cast, 5.98m prev
Market Movement Recap
08:30 AM Bonds opened slightly stronger in Asia and remained almost perfectly flat throughout the overnight session. There was a brief moment of selling pressure just now following the stronger-than-expected Jobless Claims data. But 10yr yields are staying in their overnight range, down 1.5bps at .806%. MBS are up 1 tick (+0.03).
09:36 AM Losing ground now, somewhat abruptly relative to the overnight calm. Weakness follows headlines quoting Pelosi saying stimulus could be passed before election and that talks with Trump are on a good path. Treasuries turned negative and are 2bps higher vs 830am. MBS are also in the red, down 2 ticks (0.06) at 102-30 (102.94).
02:06 PM MBS have bounced back nicely, ONCE AGAIN outperforming Treasuries which are still near their weaker levels of the day. Stimulus headlines at 10:45am (read more) were the culprit. 10yr is up just over 2bps. MBS are down only 1 tick (0.03).
MBS Commentary
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Staggering MBS Outperformance Easing Negative Momentum Pain
Bonds are in the throws of an extended negative momentum move that's been in place throughout October. At times, stimulus-related headlines ha... (read more)
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Housing News
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Existing home sales rose again in September and are now blowing the doors off last year's numbers. The National Association of Realtors® says sales of single-family homes, townhomes, condominiums, and co-ops, rose 9.4 percent from August to a sea... (read more)
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Housing News
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The refinancing share of originations increased again in September, rising 2 points to 58 percent of all loans. Ellie Mae's Origination Insight Report for September shows the increase came almost inclusively in conventional loans where the refi share... (read more)
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Housing News
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Purchase mortgage originations are expected to hit a new record high of $1.54 trillion next year. That forecast, which would be an increase of 8.5 percent over the projected total in 2020, was made at the Mortgage Bankers Association's (MBA's) virtua... (read more)
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Mortgage Rate Watch
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Rates are appreciably higher than they were last week or indeed any time in past 4 weeks. That's surprising news to those laboring under misapprehensions created by widespread reports of "all-time low rates" from last week. As we discussed yesterday,... (read more)
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Rob Chrisman
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Want some guidance? “If you get a loan at a bank, you’ll be paying it back for 30 years. If you rob a bank, you’ll be out in 10 years. Follow me for more financial advice!” Plenty of MLOs will need financial advice, given thei... (read more)
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