Bonds Break The Range, But Mortgage Rates Are Dragging Their Feet

The simple version of the story: mortgage rates aren't moving lower nearly as quickly as the bond market suggests they should be.  There are some very good reasons for that.  Today's video discusses those as well as the lock/float implications.

Econ Data / Events

  • 20min of Fed 30yr UMBS Buying 10am, 1130am (M-F) and 1pm (T-Th)

  • US Q2 GDP -32.9 vs -34.1 f'cast, -5.0 prev

  • Jobless Claims 1.434m vs 1.450m f'cast, 1.422m prev

  • Continued Claims 17.018m vs 16.2m f'cast, 16.151m prev

Market Movement Recap
08:37 AM

No major reaction to GDP/Claims.  This follows general strength in the overnight session leaving 10yr yields a total of 2.6bps lower on the day at .551. UMBS 2.0s are an eighth of a point higher on the day at 103-12 (103.375).

11:49 AM

Little-changed after the morning's modest rally, but potentially seeing resistance in Treasuries at .54%.  UMBS 2.0 is hitting resistance at 103-14 (103.44).  Stocks are well off their lows now, but still down on the day.

03:47 PM

Bonds have held ground quite well despite a relatively big recovery in stocks.  10yr yields remain near lows of day and MBS near highs--little changed from the last update.