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Bond Market Breakout is Here (The Bad One)
For days--and especially since last Friday--we've been increasingly worried that the 2-month bond rally was running out of steam and at risk of a reversal. The jury was technically out until all of our overhead ceilings were taken out. As of today, they are.
Econ Data / Events
20min of Fed 30yr UMBS Buying 10am, 1130am (M-F) and 1pm (T-Th)
Core Producer Inflation (y/y) 0.3 vs 0.0 f'cast , 0.1 prev
Market Movement Recap
08:23 AM Bonds much weaker overnight as yields finally break technical support at the .57/58 barrier. Quickly up to .62+. MBS starting out an eighth lower. Russian vaccine in the headlines, but it's a supporting actor at best.
10:42 AM Treasury yields at new highs (.646%) and MBS near the lows of the day, down 6 ticks (0.19) at 103-15 (103.47). Stocks are roughly were they were before last night's vaccine headlines (mildly stronger).
02:47 PM Cue the capitulation selling spree for MBS. They were willing to outperform until this afternoon, but are now getting caught up with Treasury weakness. 2.0 UMBS down almost half a point. 10yr yields up more than 7bps to .656%. Reprices galore.
04:05 PM Big volatility in both directions this afternoon, but stock weakness ultimately helping bonds claw back some of the day's losses. MBS now down "only" 9 ticks (.28) on the day and 10yr yields are back down to .628%. Good luck assigning blame. The huddle video goes into greater detail on that.
MBS Commentary
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Bond Market Breakout is Here (The Bad One)
For days--and especially since last Friday--we've been increasingly worried that the 2-month bond rally was running out of steam and at risk of a reversal. The... (read more)
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Housing News
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COVID-19 continued to impact mortgage performance in May. CoreLogic said the number of loans in each stage of delinquency, with the exception of those in foreclosure, grew in May, the second straight month that early-stage (loans 30 to 59 days past d... (read more)
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Rob Chrisman
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Me: “I want to travel.” Bank account: “Where? To work?” Think of people in their 20s and 30s. They’ve grown up with 9/11, the Financial Crisis, and now this coronavirus. (If all you cared about was the stock market, in 1... (read more)
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Housing News
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New research by dv01, a loan data agent (LDA) providing securitization reporting and analytics on consumer unsecured, mortgage, small business, and student loans, says the pandemic has revealed serious weaknesses in the reporting structure for mortga... (read more)
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Mortgage Rate Watch
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There are quite a few more new stories than normal about mortgage rates today. Most of them are wrong. This one is not, and it's pretty easy to see why. Freddie Mac releases its weekly mortgage rate survey every Thursday morning. The survey accepts r... (read more)
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Housing News
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Fannie Mae's Home Purchase Sentiment Index (HPSI) faltered a bit in July as it tried to recover from its 29.5-point aggregate plunge in March and April. The index, derived from six questions on the National Housing Survey (NHS), decreased 2.3 points ... (read more)
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