Lock vs Float Considerations With Rates at All-Time Lows

Stocks and bond yields are still in holding patterns relative to early June volatility.  Meanwhile, mortgage rates are at all-time lows.  There are scenarios where rates could improve, but the base case is quite the opposite.  All of the above depends on coronavirus.

Econ Data / Events

  • 11:30-11:50 AM (ET) - Fed 30yr UMBS Buying  

  • Pending Home Sales: +44.3% vs +18.9% f'cast (-21.8% prev)

Market Movement Recap
07:50 AM

No major news overnight. 10yr yields up 1.3bps to .653.  UMBS starting the day down 3 ticks (0.09).  Stocks up half a percent (futures).  

10:29 AM

Stocks slumped a bit at the 9:30am  NYSE open.  Bonds improved at the same time and are holding those gains even though stocks have bounced back.  MBS and Treasuries both now just barely positive on the day.

01:16 PM

MBS and Treasuries pulled back from slightly from the mornings modest gains.  Stocks are up on the day now and there's some correlation with bond weakness (but not as much as there has been).  10yr yields up half a bp at .645% and UMBS 2.0 are down 2 ticks (0.06) at 102-07 (102.22).

02:55 PM

Bonds have shaken off mid-day weakness and are back to unchanged (or better) levels.   Stocks are still moderately stronger on the day.  No big news or market movers.  Very sideways in the bigger picture.