MBS RECAP: Record-Breaking Job Gains, But Bonds Ultimately Improve

Posted To: MBS Commentary

Record-Breaking Job Gains, But Bonds Ultimately Improve Last month's jobs report shattered records, both for the outright level of job creation and for the gap between job growth and forecasts. While today's job count was even bigger (+4.8 million versus 2.699m last month), it wasn't as far above the forecast consensus (1.8m gap versus 10.5m last month). But even that doesn't fully explain why bonds were able to get back to stronger levels a few hours later. Waiting on covid news! Econ Data / Events 11:30-11:50 AM (ET) – Fed 30yr UMBS Buying Nonfarm Payrolls 4.8m vs 3.0m f'cast, 2.699m prev Unemployment rate 11.1 vs 12.3 f'cast , 13.3 prev Jobless Claims 1.427m vs 1.355m f'cast , 1.482m prev Market Movement Recap 08:18 AM Bonds broadly unchanged overnight despite…(read more)

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Source: Mortgage News Daily

Huge Housing Rebound, All-Time Low Rates, But At What Cost?

Posted To: Mortgage Rate Watch

This week’s economic data included the biggest-ever gain in Pending Home Sales, a leading indicator for the housing market. Meanwhile, mortgage rates pushed down to new all-time lows yet again. But at what cost? The most pessimistic way to explain the surge in home sales is to say it was only made possible by the record-setting declines in the past few months. That’s mostly true, but it fails to give credit to what the industry and government officials have been doing to help jump start economic activity. Would sales bounce back like this without all-time low mortgage rates and a stock market recovery (both made possible by emergency intervention from the Federal Reserve)? Would consumers be as comfortable spending money without the promise of additional fiscal stimulus and other support programs…(read more)

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Source: Mortgage News Daily

Anti-fraud, DPA, HMDA Products; Non-QM News in Primary and Secondary Markets

Posted To: Pipeline Press

Lenders continue to count the piles of doubloons they booked during another record-breaking month; will July be another? M&A deals are still simmering out there, but when profits are “en fuego” and July is looking strong with full pipelines, it can be tough for a fortunate owner to sell. Think of all of those unfortunate folks who bought fancy/expensive dresses or suits in February or early March: They probably won’t need them in 2020 due to the pandemic crisis. Now all one needs is a Zoom blouse or shirt . Speaking of a crisis, TBD Marketing put together a Crisis Flowchart that is easily downloadable. I hope none of you will ever need it, but we know that someone will from a PR perspective. When the health crisis began 3 ½ months ago, since no one was on vacation…(read more)

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Source: Mortgage News Daily

MBS Day Ahead: Early Close and Another (Potentially) Record-Breaking Jobs Report

Posted To: MBS Commentary

Last month's jobs report shattered records, both for the outright level of job creation (2.509m) and for the gap between job growth and forecasts. In fact, we won't likely see a gap that big, ever. We may, however, see a bigger month of job creation, and if economic forecasters are right, we'll see it this morning. The consensus calls for a payroll increase of 3.0 million. Even if that happens, it remains to be seen how willing the market is to react to such things. Last month's labor market numbers arrived at time when the market was more susceptible to second guessing the current ultra-low rate environment. Covid cases hadn't really begun their recently troublesome spikes in several states. And other economic data that week made it look like the economy may indeed have…(read more)

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Source: Mortgage News Daily

Rates at All-Time Lows Ahead of Important Jobs Data

Posted To: Mortgage Rate Watch

Mortgage rates were generally unchanged today, thus leaving the average lender at all-time lows for conventional 30yr fixed scenarios. It continues to be the case that loan scenarios with additional risk factors have NOT seen nearly as much improvement as those in the top tier. In general, however, things are starting to improve. When coronavirus rocked the financial markets in March, mortgage rates were particularly hard hit. This had a lot to do with the anticipated inability of millions of homeowners to make their mortgage payments. While the government and the mortgage industry rushed to put programs in place to help those homeowners, there were/are unavoidable consequences for mortgages in the eyes of investors. Simply put, each additional risk factor that makes forbearance (a temporary…(read more)

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Source: Mortgage News Daily

MBS RECAP: Limited Reaction to Headlines and Fed Minutes

Posted To: MBS Commentary

Limited Reaction to Headlines and Fed Minutes After a quiet trading day yesterday, today proved to be even quieter. That said, bonds were still willing to react to covid headlines and the Fed meeting minutes, albeit just barely enough to notice. Econ Data / Events 11:30-11:50 AM (ET) – Fed 30yr UMBS Buying ADP Employment 2.369m vs 3m f'cast , +3.065m prev (revised up from -2.76m) ISM Manufacturing: 52.6 vs 49.5 f'cast , 43.1 prev Construction Spending: -2.1 vs +1.0 f'cast , -3.5 prev Market Movement Recap 08:36 AM Bonds were weaker right out of the gate in the Asian trading session, but only moderately. They've been essentially flat since then with 10yr yields up 2-3bps on the day, currently trading at .686%. MBS are outperforming again, with prices currently up 1 tick (0.03…(read more)

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Source: Mortgage News Daily

Fed Meeting Minute Bullet Points: What's Yield Curve Control?

Posted To: MBS Commentary

The minutes from the most recent Fed meeting were released today. While there's not much left to be said when they've already been so clear about keeping rates low for a long time, we did get a few new thoughts about "yield curve control." That would basically entail the Fed buying whatever it takes to keep longer term rates within a certain range compared to the short-term rates it already effectively controls through the Fed Funds Rate. To be clear, the Fed doesn't control 2yr Treasury yields, but by keeping the Fed Funds Rate at zero, it greatly limits the extent to which 2yr yields can rise. Case in point, after trading in the 1-2% range in the 2nd half of 2019, 2yr yields have been under 0.30% since the end of March, and generally trading a very flat range. 10yr yields…(read more)

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Source: Mortgage News Daily

MBS Day Ahead: Economic Data Ramps Up Ahead of Week's Early Close

Posted To: MBS Commentary

After a very slow start on Monday, yesterday's month-end trading session proved to be more consequential for Treasuries with yields ultimately rising enough to make it back to the doorstep of the uptrend they'd broken out of only 2 days prior. A picture is worth more than a sentence in that regard. So is the new rally now over, and are we doomed to watch rates move steadily higher? Wouldn't you like to know! Wouldn't everyone like to know, in fact, because knowing the answers to such questions would mean knowing how the coronavirus situation would play out in the near future. That's been the key market mover on any given day, with very few exceptions. When exceptions have been made, they were for things like Fed policy and big ticket economic data. The ADP employment report…(read more)

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Source: Mortgage News Daily

Purchase Apps Retreat Again as Inventory Dries Up

Posted To: MND NewsWire

Applications for both refinancing and purchase mortgages retreated last week , pulling the Mortgage Bankers Associations (MBA’s) Market Composite Index lower for the second time in as many weeks. MBA said the index, a measure of application volume, declined by 1.8 percent on a seasonally adjusted basis during the week ended June 26 and was down 2.0 percent on an unadjusted basis. While the Refinance Index ticked down 2 percent from the week ended June 19, low interest rates kept the refinancing volume 74 percent higher than the same week one year ago. The refinance share of mortgage activity decreased to 61.2 percent of total applications from 61.3 percent the previous week. The seasonally adjusted Purchase Index dipped 1 percent and the unadjusted version was down 2 percent compared with the…(read more)

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Source: Mortgage News Daily

MBS RECAP: Surprisingly Quiet Quarter-End Trading. No Objections Here

Posted To: MBS Commentary

Surprisingly Quiet Quarter-End Trading. No Objections Here The last trading day of any given month (especially if it's also the end of a quarter) can often see elevated volatility without any obvious motivation (here's why). While that was sort of the case for Treasuries today, even they were fairly calm in the bigger picture. MBS barely budged by comparison. With rates at all time lows, no objections here! Econ Data / Events 11:30-11:50 AM (ET) – Fed 30yr UMBS Buying Case Shiller Home Prices (Apr): +0.3 vs +0.5 f'cast, +0.5 prev Consumer Confidence: 98.1 vs 91.8 f'cast, 85.9 prev Market Movement Recap 08:04 AM Both stocks and bonds are unchanged after a quiet overnight session. Both found something to like in yesterday's release of today's Powell testimony on the pandemic…(read more)

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Source: Mortgage News Daily