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A Small Risk in a Pile of Good News
For rates and the bond market, the news has been almost exclusively good for weeks-to-months. Most recently, we've seen lower lows than ever and spent more time remaining in that range than any past trip to all-time lows. In other words, we would typically expect a bounce by now. Interestingly enough, there is a very small hint at such a bounce emerging. While it's too soon to worry about it, it's not too soon to keep an eye on it.
Econ Data / Events
20min of Fed 30yr UMBS Buying 10am, 1130am (M-F) and 1pm (T-Th)
Existing Home Sales 4.72m vs 4.78m f'cast , 3.91 prev
Market Movement Recap
08:33 AM Socks and bonds yields were both slightly lower overnight. The biggest move followed news about the closure of the Chinese consulate in Houston (yes, really). 10yr yields are down 1.9bps at .586 and 2.0 UMBS are up 2 ticks (0.06).
10:44 AM No detectable reaction to home sales data. Bonds remain roughly unchanged-to-slightly-stronger. 10yr yields may be seeing some resistance at the range floor of .58%.
01:25 PM 2.0 UMBS are now up an eighth of a point on the day at 103-01 (103.03). 10yr yields are down 1.6bps at .589 and as yet unwilling to break below the .58% range boundary. MBS outperformance followed the Fed's last bond buying operation of the day.
03:22 PM There was a fairly quick bout of selling just after 2pm, but it has since been corrected. It was more noticeable in MBS than Treasuries. Both lost a bit of ground but remain modestly stronger on the day.
MBS Commentary
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A Small Risk in a Pile of Good News
For rates and the bond market, the news has been almost exclusively good for weeks-to-months. Most recently, we've seen lower lows than ever and spent more time remai... (read more)
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Housing News
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Existing home sales ended a three-month string of losses arising out of the COVID-19 pandemic with a flourish, soaring by 20.7 percent from May to June. Sales rose from a seasonally adjusted annual rate of 3.91 million units in May to 4.72 million un... (read more)
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Mortgage Rate Watch
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Mortgage rates have been holding a very narrow range since July 9th. They also hit new all-time lows on July 9th. A few of the days since then have been slightly better and--less frequently--slightly worse, but any one of them is noticeably better th... (read more)
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Housing News
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Even with some interest rates ticking higher, both purchase and refinance activity increased last week. The Mortgage Bankers Association (MBA) said its Market Composite Index, a measure of mortgage loan application volume, increased 4.1 percent on a ... (read more)
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Housing News
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House prices fell in May, although they remain well ahead of prices a year earlier. The Federal Housing Finance Agency (FHFA) said its House Price Index (HPI) dropped by 0.3 percent from its April levels. Prices were down or unchanged in eight of the... (read more)
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Rob Chrisman
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Originators, as Deb from Virginia reminded me, are currently like ducks: cool and calm on the surface, paddling frantically underneath. Originators like low rates, but not if their clients can’t qualify for a loan. Furloughs are becoming perman... (read more)
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