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Bonds Are Boring Today, So Let's Talk About 1.5 UMBS
Treasuries did little to react to a smattering of potentially market moving headlines today (surprisingly little, in fact, considering Treasury is unexpectedly clawing back hundreds of billions of dollars of the Federal Reserve's lending power and suggesting those funds be redirected to targeted stimulus). Rather than force a discussion of questionably relevant market movers, we can instead focus on something of actual interest to the mortgage bond market: the rapid increase in prevalence of 1.5 UMBS 30yr fixed coupons! Today's AM commentary and video go into much more detail on the topic.
Econ Data / Events
20min of Fed 30yr UMBS Buying 10am, 1130am (M-F) and 1pm (T-Th)
Market Movement Recap
09:48 AM Treasuries started the overnight session in stronger territory as Secretary Mnuchin's request for the Fed to return $455 bln earmarked for pandemic response created an uncertainty bid (and lowered the implied supply pressure on US government debt). This move was unexpected as far as markets and the Fed are concerned. Mnuchin clarified his stance in a CNBC interview this morning and bonds bounced back into weaker territory. 10yr yields are up half a bp at .847 and MBS are down 1-2 ticks, bringing them right in line with yesterday's best levels (not counting the pop right at the close).
01:30 PM Treasuries have been fairly stable after modest losses in the 9am hour. Yields are still slightly lower on the day at .836 (10yr). MBS are underperforming with 1.5 and 2.0 UMBS coupons both slightly weaker vs yesterday's latest levels (2 ticks or -0.06). Stocks are still slightly weaker on the day as well. Trading is ho-hum ahead of the holiday week with little (if any) clear connections between news/data and market reactions.
MBS Commentary
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Bonds Are Boring Today, So Let's Talk About 1.5 UMBS
Treasuries did little to react to a smattering of potentially market moving headlines today (surprisingly little, in fact, considering Treasury is unexpect... (read more)
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Housing News
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Ellie Mae said the interest rate across all closed loans dropped below 3 percent for the first time in the nine years the company has been tracking the data. Ellie Mae is now a part of ICE Mortgage Technology, a division of Intercontinental Exchange,... (read more)
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Housing News
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The forbearance plan rolls expanded slightly over the past week, reversing two weeks of falling numbers. Black Knight said the total of loans in approved plans, which had declined by 273,000 over the previous two weeks, rose by 30,000. This brings th... (read more)
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Rob Chrisman
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Many years ago I was hanging out with George Clooney and made the mistake of telling him, “Look, you’ll never amount to much as an actor. You’d be much better off sending out a free daily commentary.” He thought differently an... (read more)
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Mortgage Rate Watch
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August 4th, 2020 was the best day ever for mortgage rates . That's when we hit the lowest all-time lows we've ever seen, and none of the most prevalent news stories about all-time lows since then have been technically accurate. What's going on here? ... (read more)
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Housing News
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The Federal Housing Finance Agency (FHFA) has reached another milestone as it tries to resolve the 12-year conservatorship of the GSEs. On Wednesday it released a new regulatory capital framework for Fannie Mae and Freddie Mac. The final rule, a revi... (read more)
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