Surprisingly Swift Selling in The Bond Market; What's Next? This week has been one of the most surprising selling sprees in bonds in the post-covid era.  Just when you think we've surely seen enough selling to bring buyers in, it's right back to new long-term high yields and significantly lower MBS prices.  That bounce is coming, to be sure, but it's a risky proposition to bet on it.  Moreover, when it happens, it changes nothing about the broader trend toward higher yields that's been intact for more than 6 months.  This week just happens to offer a more abrupt adjustment to the pace of that trend. Econ Data / Events Fed MBS Buying  10am, 1130am, 1pm Markit PMI Composite 58.8 vs 58.7 prev Existing Home Sales 6.69m vs 6.61m f'cast, 6.65m prev Market Movement Recap 08:28 AM Treasuries opened modestly stronger in Asia, but 10yr yields failed at 1.28% again.  Steady-to-stronger data in Europe pushed yields higher heading into the domestic session.  10yr is up 1.4bps at 1.311% and 2.0 UMBS are down nearly an eighth. 10:25 AM After an underwhelming attempt at a friendly bounce after 9:30am, bonds are on the back foot again and MBS are quickly down to new lows (and 10yr up to new highs of 1.336+).  There are no new market movers in play in terms of data or headlines (but big trades hit TSY futures at 10:08am and added to the weakness). 12:23 PM 1.338 ceiling held up against multiple breakout attempts but finally gave way a short while ago.  Yields are doing what yields do after a technical breakout (moving higher).  Currently over 1.35%.  MBS aren't happy about it.  2.0 coupons are down 3/8ths and the increasingly relevant 2.5 coupons are down almost a quarter point. 02:51 PM More minutes on the clock, more bond selling.  Highest highs of the day shortly after the last update with 10yr hitting 1.36+.  UMBS 2.0 coupons were as low as 101-16 (101.5) briefly.  Both have bounced modestly since then, but the damage is done as far as rate sheets and reprice potential are concerned.

February 19, 2021 Download our Mobile App: Download our Mobile App: MBS Commentary MBS Live Recap: Surprisingly Swift Selling in The Bond Market; What's Next? Surprisingly Swift Selling in The Bond Market; What's Next? This week has been one of the most surprising selling sprees in bonds in the post-covid era.  Just when you think we've surely seen enough sell... (read more) Mortgage Rate Watch Yes, Mortgage Rates are MUCH Higher This Week Volatility has returned to the mortgage market in grand fashion this week with many lenders quoting rates that are as much as a quarter of a point higher than they were last week. That means if you were looking at something in the 2.75% neighborhood ... (read more) Housing News Permitting Soars as Builders Prep for Spring Builders appear to be prepping for a huge spring . While the U.S. Census Bureau and the Department of Housing and Urban Development report that housing starts were down in January, typically the case in winter, housing permits were issued at what is ... (read more) Housing News Buyer Demand Shores Up Builder Confidence After dropping from record high levels by a total of 7 points over the last two months, the index that measures home builder confidence has stabilized. The Housing Market Index (HMI), produced by the National Association of Home Builders (NAHB) and W... (read more) Housing News Forbearance Relief Extended Through June The White House announced on Tuesday that the various COVID-19 relief programs available through The Department of Housing and Urban Development, Veterans Administration, and the Department of Agriculture will be extended. The forbearance program, wh... (read more) Rob Chrisman MLO and Ops Jobs; Fee Collection, HELOC, Renovation Products; Comp Survey; Bank M&A Trends (To listen to the audio version of today’s commentary, please click here .) I received many nice comments about the section in yesterday’s commentary about losing people in our industry before their time. Unfortunately, there was one that... (read more) Mortgage Rates 30 Yr. Fixed Rate 5.25% -0.08% Rate Change Points Mortgage News Daily 30 Yr. Fixed 5.25% -0.08 0.00 15 Yr. Fixed 4.58% -0.07 0.00 30 Yr. FHA 4.68% -0.04 0.00 30 Yr. Jumbo 4.68% -0.02 0.00 5/1 ARM 5.52% +0.02 0.00 30 Yr. VA 4.75% 0.00 0.00 Updates Daily - Last Update: 8/15 15 Yr. Fixed Rate 4.58% -0.07% Rate Change Points Freddie Mac 30 Yr. Fixed 5.30% -0.40 0.80 15 Yr. Fixed 4.45% -0.38 0.80 5/1 Yr. ARM 4.19% -0.31 0.40 Updates Weekly - Last Update: 7/7 Rate Change Points Mortgage Bankers Assoc. 30 Yr. Fixed 5.74% -0.08 0.61 15 Yr. Fixed 4.95% +0.07 0.67 30 Yr. Jumbo 5.32% +0.01 0.43 Updates Weekly - Last Update: 7/27 MBS / Treasuries UMBS 30YR 4.0 99.89 +0.14 Price / Yield Change MBS UMBS 4.0 99.89 +0.14 UMBS 4.5 101.17 +0.11 GNMA 4.0 100.80 +0.14 GNMA 4.5 101.59 +0.03 Pricing as of: 8/15 9:05PM EST 10 Year US Treasury 2.7788 -0.0144 Price / Yield Change US Treasury 2 YR Treasury 3.176 -0.019 5 YR Treasury 2.888 -0.019 7 YR Treasury 2.842 -0.020 10 YR Treasury 2.773 -0.020 30 YR Treasury 3.092 -0.011 Pricing as of: 8/15 9:05PM EST Latest Video Fed's Williams: Not concerned about stimulus being excessive right now The Bond Report - 2pm - February 19, 2021 February first read for Markit Manufacturing PMI comes in at 58.5 The Bond Report - 9am - February 19, 2021 Around the Web Reuters U.S. House Democrats advance $1.9 trillion COVID-19 aid bill CNBC Fed's Williams say high market prices justified by economic growth and low rates Reuters Fed sees 'considerable' risk of ongoing U.S. business failures Calculated Risk Blog Q1 GDP Forecasts: Movin' on up CNBC Rise in Treasury yields prompts speculation of a tantrum' for markets Calculated Risk Blog Hotels: Occupancy Rate Declined 29.0% Year-over-year Calculated Risk Blog LA Area Port Traffic: Strong Imports, Weak Exports in January CNBC Treasury yields rise amid concerns about higher inflation CNBC House aims to vote on Covid relief bill by the end of next week, Pelosi says CNBC Lumber prices top $1,000 for the first time as single-family housing starts drop 12% Calculated Risk Blog Comments on January Housing Starts CNBC Treasury yields rise after jobless claims data Calculated Risk Blog Housing Starts decreased to 1.580 Million Annual Rate in January

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