MBS Struggle to Hold Gains, But Rates Aren't Scared Yet Bonds were mixed today with both MBS and Treasuries gaining ground (and then losing slightly less ground) at varying paces.  Treasuries outperformed, but that's not a huge surprise on a rally day.  Both have bigger fish to fry in the days ahead with plenty of potential volatility from the election, Fed announcement, and NFP.  Stakes are higher for Treasuries compared to MBS, and MUCH higher compared to mortgage rates (which have been extremely well insulated by most of the recent bond market volatility due to historically wide lender margins).  Still, if there's one market catalyst in the near term that could get things moving, it would be the election.   Econ Data / Events 20min of Fed 30yr UMBS Buying  10am, 1130am (M-F) and 1pm (T-Th) ISM Manufacturing 59.3 vs 55.8 f'cas t, 55.4 prev Market Movement Recap 09:13 AM Bonds opened stronger in Asia, lost some ground on stronger data in Europe, and have been moving into stronger territory ever since.  Both stocks and bonds are doing better as traders cautiously jump back into long positions for the new month.  10yr yields down 3+ bps to .84% and 2.0 UMBS up 6 ticks (.19) at 103-10 (103.31). 12:55 PM Bonds are off their best levels, but not panicking.  The 1.5 UMBS coupon is the only noticeable laggard.  There is no overt underlying motivation for the move apart from the fact that 1.5 coupons are simply going to march to their own beat from time to time as they continue to build liquidity. 03:00 PM UMBS 2.0 coupons joined in the selling trend and hit lows just before 2pm.  They haven't moved much since then, but are still up 3 ticks (0.09) on the day.  10yr yields are at their highest levels since this morning, now down only 2.35bps on the day at .85%.  Very calm and narrow trading day relative to the volatility seen at the end of last week.

November 2, 2020 Download our Mobile App: Download our Mobile App: 30 Yr. Fixed 6.28% -0.01%   6.11% 7.26% 15 Yr. Fixed 5.65% +0.05%   5.54% 6.59% 30 Yr. Jumbo 6.25% +0.00%   6.25% 7.45% Compare Mortgage Rates from Local Lenders for Nov 2, 2020 2016 Reminds Us How Completely Crazy Next Week Could Be For Rates Fri, Oct 30, 2020 7:20PM The 2016 election won't soon be forgotten in the mortgage or bond markets. Many of the predictions were dead wrong when it came to how interest rates would react to a Trump victory, and the reason ended up being very simple in hindsight. Are there any parallels that can help us prepare for the coming week? First off, let's be clear on what we're discussing. A picture is worth more than words in this case. 10yr Treasury yields are the best indication of the longer-term bond market. Mortgage-backed bonds (which determine mortgage rates) tend to move in a substantially similar way over time. As s... (read more) Mortgage News Daily Rate Change Points 30 Yr. Fixed 6.28% -0.01 0.00 15 Yr. Fixed 5.65% +0.05 0.00 30 Yr. FHA 5.94% -0.01 0.00 30 Yr. Jumbo 6.25% 0.00 0.00 7/6 SOFR ARM 5.62% +0.03 0.00 30 Yr. VA 5.95% -0.02 0.00 Updates Daily - Last Update: 9/8 Freddie Mac Rate Change Points 30 Yr. Fixed 6.50% -0.06 0.00 15 Yr. Fixed 5.60% -0.09 0.00 Updates Weekly - Last Update: 9/4 Mortgage Bankers Assoc. 30 Yr. Fixed 6.64% -0.05 0.59 15 Yr. Fixed 5.84% -0.19 0.84 30 Yr. Jumbo 6.58% -0.09 0.39 Updates Weekly - Last Update: 9/3 UMBS 30YR 5.5 101.22 -0.06   97.47 101.61 UMBS 30YR 6.0 102.47 -0.07   99.66 102.50 10 YR Treasury 4.065 +0.026   3.621 4.780 MBS Live Recap: MBS Struggle to Hold Gains, But Rates Aren't Scared Yet Mon, Nov 2, 2020 3:18PM MBS Struggle to Hold Gains, But Rates Aren't Scared Yet Bonds were mixed today with both MBS and Treasuries gaining ground (and then losing slightly less ground) at varying paces.  Treasuries outperformed, but that's not a huge surprise on a rally day.  Both have bigger fish to fry in the days ahead with p... (read more) MBS Price Change UMBS 5.0 99.68 -0.10 UMBS 5.5 101.22 -0.06 UMBS 6.0 102.46 -0.07 GNMA 5.0 100.01 -0.07 GNMA 5.5 101.18 -0.01 GNMA 6.0 102.12 -0.06 Pricing as of: 9/9 6:51AM EST US Treasury Yield Change 2 YR Treasury 3.503 +0.015 5 YR Treasury 3.580 +0.019 7 YR Treasury 3.789 +0.021 10 YR Treasury 4.065 +0.026 30 YR Treasury 4.723 +0.033 Pricing as of: 9/9 6:51AM EST Other News Fannie/Freddie Report Increased Profits Fri, Oct 30, 2020 11:54AM Both GSEs reported financial results for the third quarter of 2020 that were significantly higher than both their Q2 2020 and their 2019 numbers . Fannie Mae's net and its comprehensive incomes were $4.2 billion and Freddie Mac's net and comprehensive incomes came in at $2.5 billion and $2.4 billion, respectively. Fannie Mae's comprehensive income in the sec... (read more) Forbearance Plans Increase, Many are Reinstatements Fri, Oct 30, 2020 10:12AM The number of loans in COVID-19 related forbearance plans rose during the past week, driven by both an increase in new plans and significantly fewer borrowers exiting from the program. Black Knight said its weekly survey found a net increase of 31,000 mortgage loans in forbearance plans, a 1.0 percent increase. There were 33,000 plan starts. The number of st... (read more) Residential Fixed Investment Soared Past GDP Growth in Q3 Fri, Oct 30, 2020 10:06AM Hidden in the Q3 report on Gross Domestic Product (GDP) on Thursday, which showed a rebound of 33.1 percent from the 31.4 percent loss in Q2 was news of some real growth. Robert Dietz, chief economist of the National Association of Home Builders points out, in an article in NAHB's Eye on Housing blog, that residential fixed investment (RFI), which includes h... (read more) Ops and Sales Jobs; Database, Servicing, Non-QM, Income Analysis Products; Upcoming Training and Events Mon, Nov 2, 2020 9:44AM Some would say that the year is either flying by, others would suggest it is slowly bumping along the bottom. Either way, here we are in November, and turkey farmers and butchers are wondering how to adapt their products to proposed smaller family gatherings where 25-pound turkeys aren’t needed. Turkey thighs or breasts only? In evaluating a new produc... (read more) Latest Video October ISM manufacturing index sees best number since August Markit U.S. manufacturing PMI for October comes in at 53.4 vs. 53.3 expecte... The 9 a.m. Bond Report: November 2, 2020 The 9 a.m. Bond Report: October 30, 2020 Around the Web Calculated Risk Blog The Election and 2021 Economic Forecast Calculated Risk Blog ISM Manufacturing index Increased to 59.3 in October Calculated Risk Blog Construction Spending Increased 0.3% in September Calculated Risk Blog Eight High Frequency Indicators for the Economy CNBC PPP loan borrowers are being steered toward forgiveness. Why they should slow down NAR - Realtor.com Why This Winter's Slow' Home-Selling Season May Be Hotter Than Ever NAR - Realtor.com Dearth of Credit Starves Detroit's Housing Market Calculated Risk Blog Las Vegas Visitor Authority: No Convention Attendance, Visitor Traffic Down 51% YoY in September Calculated Risk Blog Q3 2020 GDP Details on Residential and Commercial Real Estate CNBC Fed lowers minimum loan level for small business lending program Calculated Risk Blog Real Personal Income less Transfer Payments NAHB Eye on Housing Jobless Claims Continue to Fall Calculated Risk Blog Personal Income increased 0.9% in September, Spending increased 1.4%

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