Lots of Competing Motivations Causing Volatility In a Narrow Range Today marked an uptick in the importance of economic data for the week and it had obvious consequences for volatility.  Of particular importance was the higher reading in quarterly PCE prices.  Because this is the first look at Q2 data, it's one of 4 days each year where the PCE component of the GDP data offers a sneak peek at the full PCE report that comes out the following morning.  the 2.9 vs 2.7 reading suggests there's extra inflation that will be distributed between April, May, and June.  If June accounts for more than the other two months, tomorrow's PCE index will be higher than expected, and thus bad for rates.  That accounts for some weakness this morning, but traders are also in the midst of adjusting their yield curve positioning which has resulted in big discrepancies between longer and shorter term rates this week. Econ Data / Events Jobless Claims 235k vs 238k f'cast, 245k prev Durable Goods -6.6 vs 0.3 f'cast, 0.1 prev Nondefense ex-air Durable Goods 1.0 vs 0.2 f'cast, -0.9 prev  GDP  2.8 vs 2.7 f'cast Core PCE Prices Q/Q 2.9 vs 2.7 f'cast Market Movement Recap 08:56 AM Sharply stronger overnight but losing ground after data.  MBS still up 7 ticks (.22) and 10yr still down 5+ bps at 4.24. 11:51 AM Decent amount of volatility in the AM hours.  Slightly negative drift, but MBS still up 6 ticks (.19) and 10yr still down 6bps at 4.229 01:43 PM Generally weaker after the auction, with losses focused on the short end.  MBS still up an eighth.  10yr still down 3bps, but near highs of day at 4.258

July 25, 2024 Download our Mobile App: Download our Mobile App: 30 Yr. Fixed 6.58% -0.04%   5.99% 6.87% 15 Yr. Fixed 6.15% -0.01%   5.55% 6.25% 30 Yr. Jumbo 6.81% +0.01%   6.1% 6.95% Compare Mortgage Rates from Local Lenders for Jul 25, 2024 Mortgage Rates Inch to Another Short Term High Thu, Jul 25, 2024 2:52PM Mortgage rates continue moving in very small steps from day to day--something that's been the case since the Consumer Price Index (CPI) more than 2 weeks ago.  Unfortunately, more of those steps have been higher in the past week, and today is no exception for most lenders. This is counterintuitive to those who closely follow bonds markets and who understand that mortgage rate movement closely matches those underlying market movements.  Reason being: bonds are technically in stronger territory compared to yesterday.  Strength in the bond market almost always coincides with lowe... (read more) Mortgage News Daily Rate Change Points 30 Yr. Fixed 6.58% -0.04 0.00 15 Yr. Fixed 6.15% -0.01 0.00 30 Yr. FHA 6.15% 0.00 0.00 30 Yr. Jumbo 6.81% +0.01 0.00 7/6 SOFR ARM 6.30% +0.06 0.00 30 Yr. VA 6.17% 0.00 0.00 Updates Daily - Last Update: 6/18 Freddie Mac Rate Change Points 30 Yr. Fixed 6.47% -0.05 0.00 15 Yr. Fixed 5.81% -0.03 0.00 Updates Weekly - Last Update: 6/18 Mortgage Bankers Assoc. 30 Yr. Fixed 6.60% 0.00 0.63 15 Yr. Fixed 6.02% +0.03 0.65 30 Yr. Jumbo 6.62% -0.04 0.57 Updates Weekly - Last Update: 6/17 UMBS 30YR 5.0 98.13 +0.13   96.76 100.50 UMBS 30YR 5.5 100.20 +0.12   98.96 101.64 10 YR Treasury 4.456 -0.040   3.948 4.668 Lots of Competing Motivations Causing Volatility In a Narrow Range Thu, Jul 25, 2024 3:29PM Lots of Competing Motivations Causing Volatility In a Narrow Range Today marked an uptick in the importance of economic data for the week and it had obvious consequences for volatility.  Of particular importance was the higher reading in quarterly PCE prices.  Because this is the first look at Q2 data, it's... (read more) MBS Price Change UMBS 4.5 95.81 +0.19 UMBS 5.0 98.13 +0.13 UMBS 5.5 100.20 +0.12 GNMA 4.5 95.94 +0.00 GNMA 5.0 98.56 +0.28 GNMA 5.5 100.36 +0.21 Pricing as of: 6/20 9:47AM EST US Treasury Yield Change 2 YR Treasury 4.179 -0.007 5 YR Treasury 4.234 -0.033 7 YR Treasury 4.340 -0.030 10 YR Treasury 4.456 -0.040 30 YR Treasury 4.896 -0.035 Pricing as of: 6/20 9:47AM EST Other News Hedging, VOE, DPA Products; Wholesaler and Program Changes; STRATMOR Ops Workshop Thu, Jul 25, 2024 11:38AM As lenders continue to deal with change (the latest rumors have Flagstar is selling its mortgage group to Mr. Cooper; rumor only, ask your rep for real information), many people took note when ex-President Trump claimed, during his recent speech, that, “mortgage rates have quadrupled” during the Biden Administration. So, if Agency 30-year fixed rate mortgage... (read more) Latest Video Former St. Louis Fed President: Probability of a recession isn't any higher... The Fed could cut rates by 50 basis points in September, says BMO's Yung-Yu... Concerns about unsold homes and price drops are unwarranted, says Evercore ... Regions Wealth's Alan McKnight expects a Fed rate cut in September Around the Web CNBC U.S. economy grew at a 2.8% pace in the second quarter, more than expected Calculated Risk Blog Realtor.com Reports Active Inventory Up 36.9% YoY Marketwatch Former Fed official Dudley backs July rate cut, worries labor market weakness might gather steam Eye on Housing U.S. Economic Growth Accelerated in Second Quarter Calculated Risk Blog Watch Months-of-Supply! Eye on Housing Housing Share of GDP Remains Above 16% Despite Marginal Declines in Residential Investment CNBC Treasury yields fall ahead of key economic data Calculated Risk Blog BEA: Real GDP increased at 2.8% Annualized Rate in Q2 CNBC Why an indicator that has foretold almost every recession doesn't seem to be working anymore Calculated Risk Blog Weekly Initial Unemployment Claims Decrease to 235,000 Marketwatch 2-year Treasury rallies on wave of risk-off sentiment, sending yield to lowest in more than five months Eye on Housing Sawmill Production Declines During First Quarter Calculated Risk Blog AIA: Architecture Billings Declined in June; Multi-family Billings Declined for 23rd Consecutive Month

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