Today had the dubious distinction of seeing the highest yields in more than 4 months while also being uneventful and largely sideways in terms of bond market momentum. The steeper losses were limited to the overnight session with 8am bringing a quick but shallow correction. Bonds were back to levels that would only be considered modestly weaker by 10am and the rest of the day was spent drifting sideways in the same territory. There were no standout market movers, news headlines, or Fed comments.
Nonfarm Payrolls
303k vs 200k f’cast, 270k prev
Unemployment Rate
3.8 vs 3.9 f’cast, 3.9 prev
Earnings
0.3 vs 0.3 f’cast, 0.2 prev (revised up 0.1)
09:33 AM
Follow-through selling overnight with 10s opening as high as 4.463. Now up only 2.5bps at 4.427. MBS down an eighth after opening down more than a quarter point.
11:51 AM
Rally stalled. MBS an eighth off highs and 6 ticks (.19) lower day over day. 10yr down 2.4bps at 4.425
02:18 PM
bouncing back a bit heading into the 2pm hour. MBS down only an eighth. 10yr up 1.1bps at 4.413
04:28 PM
Gliding flat into the 5pm close. MBS still down an eighth. 10yr up 1.9 bps at 4.421.
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Mysterious Afternoon Gains Bring Yields Back Into The Range Just Before Jobs Report
By:
Matthew Graham
Thu, Apr 4 2024, 4:33 PM
Mysterious Afternoon Gains Bring Yields Back Into The Range Just Before Jobs Report
It was a surprisingly and mysteriously decent day for the bond market (and even more decent for mortgage rates). Unlike other days this week, overnight and early morning weakness was minimal. Gains began ramping up right after the Jobless Claims data. The direction of the move is no mystery, considering claims came in at 221k vs 214k, but the pace of the move is harder to explain. Claims don’t typically have as noticeable an impact. No matter… yields drifted sideways to slightly higher into 2pm and everything seemed to make sense until another sharp little rally over the following 2 hours. A big stock sell-off was clearly involved and perhaps some buzz surrounding geopolitical risks. All told, it was enough to get yields back into the range that was broken on Monday (4.32% key level in 10yr) right before the jobs report flips a coin on another big breakout. Of course if the coin lands on the other side, rates are more likely to take a friendly lead-off heading into next week’s CPI.
Jobless Claims
221k vs 214k f’cast, 212k prev
Continued Claims
1791k vs 1810k prev
09:40 AM
Sideways to slightly weaker overnight. Stronger after data. MBS up an eighth. 10yr down 3.2bps at 4.318
01:26 PM
Off the best levels with MBS up only 1 tick (0.03). 10yr 0.4bps higher at 4.354.
03:40 PM
Flight to safety surge in the PM with 10s down 4bps to the lows of the day at 4.31. MBS up an eighth.
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The date and underlying events may have changed, but the price action in MBS was strikingly similar. Prices fell abruptly in the first 2 hours and then reversed at 10am, ultimately making it back near unchanged levels by the afternoon. Data played more of a role today with ADP and S&P Global PMI adding to the weakness early. ISM Services PMI was right in line with the S&P version, but it was very different in terms of price/inflation measurements (lowest price index in 4 years). Fed Chair Powell helped in the afternoon as he maintained that recent econ data is an acceptable bump on the road to rate cuts.
ADP Employment
184k vs 148k f’cast, 155k prev
ISM Services
51.4 vs 52.7 f’cast, 52.6 prev
ISM Employment
48.5 vs 48.0 prev
ISM Prices
53.4 vs 58.6 prev
08:34 AM
Only slightly weaker overnight, but more selling after ADP employment. 10yr up 3.6bps at 4.381. MBD down 6 ticks (.19).
10:09 AM
Additional weakness into ISM data, but bouncing back slightly afterward. 10yr yields are down more than 3bps since the release, but still up 3.6bps on the day at 4.391. MBS now down 6 ticks (.19) instead of 12 ticks (.375) before the data.
12:34 PM
Treasuries turning green with 10yr down 0.2 bps at 4.354. MBS down only 3 ticks (.09). Powell speech helping.
03:07 PM
Best levels of the day with MBS unchanged and 10yr down half a bp at 4.352.
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Mortgage rates swung slightly lower last week, fueling a significant jump in mortgage demand for the second straight week. Total application volume rose 7.1%, compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) decreased to 6.84% from 7.02%, with points falling to 0.65 from 0.67 (including the origination fee) for loans with a 20% down payment.
“Mortgage rates dropped below 7% last week for most loan types because of incoming economic data showing a weaker service sector and a less robust job market, with an increase in the unemployment rate and downward revisions to job growth in prior months,” said Mike Fratantoni, senior vice president and chief economist at the MBA.
As a result, applications to refinance a home loan, which are most sensitive to weekly rate moves, rose 12% for the week and were 5% higher than the same week one year ago.
“While these percentage increases are large, the level of refinance activity remains quite low, and we expect that most of this activity reflects borrowers who took out a loan at or near the peak of rates in the past two years,” added Fratantoni.
Applications for a mortgage to purchase a home rose 5% for the week but were still 11% lower than a year ago. Homebuyers are up against more than just high interest rates. They are looking at sky-high home prices and a still lean supply of houses for sale. While more inventory is coming onto the market with the spring season, it is not enough to meet the demand, especially for smaller, starter homes.
Mortgage rates rose slightly at the start of this week, after a government report on consumer prices came in higher than expected Tuesday. However, the increase was smaller than previous reactions to similar economic data.
“It suggests the market is starting to see more convincing signs that inflation and the economy stand a better chance deliver rate-friendly news in the near future as opposed to news that would cause a big resurgence,” said Matthew Graham, chief operating officer at Mortgage News Daily.
Bonds began the day in much weaker territory as Treasuries followed European yields higher after a series of stronger PMIs overnight. Domestic traders added to the weakness early with 10yr yields hitting their highest levels since November. Bonds found their footing after an as-expected JOLTS report and MBS even made it all the way back to “unchanged” just before 3pm. Nevertheless, 10yr yields had broken their recent 4.32% ceiling. As always technical levels don’t predict the future. This breakout reinforces the headwinds of the past few weeks and acknowledges the risks associated with the incoming data. If that data is friendly, this will not look like an important technical breakout in hindsight. But the opposite is also true: stronger data would make this breakout look like ominous foreshadowing.
Job Openings
8.756m vs 8.75m f’cast, 8.748m prev
08:52 AM
10yr yields up 7.8bps at 4.394. MBS are down just over a quarter of a point.
11:12 AM
Pushing back after uneventful JOLTS. MBS down only an eighth. 10yr up 4.5bps at 4.361.
01:51 PM
Sideways to slightly stronger. MBS down only 2 ticks (.06) and 10yr up 4.3bps at 4.359
02:30 PM
MBS turn green, now up 1 tick (.03). 10yr still up 4.4bs at 4.36, but 5yr Treasury now unchanged as well.
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Positioning and Data Deliver Double Whammy For Bonds
By:
Matthew Graham
Mon, Apr 1 2024, 3:54 PM
Positioning and Data Deliver Double Whammy For Bonds
There were no whammies last week as bonds drifted sideways to slightly stronger in a narrow range. The new week/month began with an unpleasant double whammy, unfortunately, due to positioning and economic data. Traders began selling in waves right out of the gate. The first two waves (8am and 8:20am) were best explained by traders closing out last week’s 3.5-day weekend protections and other traders opening new positions for the month of April. Additional selling followed the stronger PMI data (both from S&P and ISM) which included higher price components. Longer-dated Treasuries fared much worse at first, but short-term yields closed the gap a bit by the afternoon. All told, 10yr yields jumped more than 12bps to close just over the 4.32% technical level. MBS lost roughly half a point by 4pm.
ISM Manufacturing PMI
50.3 vs 48.4 f’cast, 47.8 prev
ISM Prices Paid
55.8 vs 52.7 f’cast, 52.5 prev
09:20 AM
Roughly unchanged overnight, but sharply weaker since 8am, especially for the long end of the curve. MBS down 5 ticks (.16) and 10yr up 5.6bps at 4.257.
11:03 AM
Bigger sell-off after ISM data. MBS down almost half a point. 10yr up 11.5bps at 4.316.
01:04 PM
Fairly flat at the weakest levels. MBS down a half point. 10yr up 12.5bps at 4.326
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Today’s average mortgage rates on Mar. 29, 2024, compared with one week ago. We use rate data collected by Bankrate as reported by lenders across the US.
Current mortgage refinance rates
Refinance rates are still high, but your personal interest rate will depend on your credit history, financial profile and application.
Average refinance rates reported by lenders across the US as of March 28, 2024. We track refinance rate trends using information from Bankrate.
Mortgage refinance rates change every day. Experts recommend shopping around to make sure you’re getting the lowest rate. By entering your information below, you can get a custom quote from one of CNET’s partner lenders.
About these rates: Like CNET, Bankrate is owned by Red Ventures. This tool features partner rates from lenders that you can use when comparing multiple mortgage rates.
Refinance rate news
A vast majority of US homeowners already have mortgages with a rate below 6%. Because mortgage refinance rates have been averaging above 6.5% over the past several months, households are choosing to hold on to their existing mortgages instead of swapping them out with a new home loan.
If rates fell to 6%, at least a third of borrowers who took out mortgages in 2023 could reduce their rate by a full percentage point through a refinance, according to BlackKnight.
Refinancing in today’s market could make sense if you have a rate above 8%, said Logan Mohtashami, lead analyst at HousingWire. “However, with all refinancing options, it’s a personal financial choice because of the cost that goes with the loan process,” he said.
Where refinance rates are headed in 2024
Mortgage rates have been sky-high over the last two years, largely as a result of the Federal Reserve’s aggressive attempt to tame inflation by spiking interest rates. Experts say that decelerating inflation and the Fed’s projected interest rate cuts should help stabilize mortgage interest rates by the end of 2024. But the timing of Fed cuts will depend on incoming economic data and the response of the market.
For homeowners looking to refinance, remember that you can’t time the economy: Interest rates fluctuate on an hourly, daily and weekly basis, and are influenced by an array of factors. Your best move is to keep an eye on day-to-day rate changes and have a game plan on how to capitalize on a big enough percentage drop, said Matt Graham of Mortgage News Daily.
What does it mean to refinance?
When you refinance your mortgage, you take out another home loan that pays off your initial mortgage. With a traditional refinance, your new home loan will have a different term and/or interest rate. With a cash-out refinance, you’ll tap into your equity with a new loan that’s bigger than your existing mortgage balance, allowing you to pocket the difference in cash.
Refinancing can be a great financial move if you score a low rate or can pay off your home loan in less time, but consider whether it’s the right choice for you. Reducing your interest rate by 1% or more is an incentive to refinance, allowing you to cut your monthly payment significantly.
How to choose the right refinance type and term
The rates advertised online often require specific conditions for eligibility. Your personal interest rate will be influenced by market conditions as well as your specific credit history, financial profile and application. Having a high credit score, a low credit utilization ratio and a history of consistent and on-time payments will generally help you get the best interest rates.
30-year fixed-rate refinance
The average rate for a 30-year fixed refinance loan is currently 6.88%, a decrease of 14 basis points from what we saw one week ago. (A basis point is equivalent to 0.01%.) A 30-year fixed refinance will typically have lower monthly payments than a 15-year or 10-year refinance, but it will take you longer to pay off and typically cost you more in interest over the long term.
15-year fixed-rate refinance
For 15-year fixed refinances, the average rate is currently at 6.39%, a decrease of 9 basis points from what we saw the previous week. Though a 15-year fixed refinance will most likely raise your monthly payment compared to a 30-year loan, you’ll save more money over time because you’re paying off your loan quicker. Also, 15-year refinance rates are typically lower than 30-year refinance rates, which will help you save more in the long run.
10-year fixed-rate refinance
The average rate for a 10-year fixed refinance loan is currently 6.27%, a decrease of 11 basis points compared to one week ago. A 10-year refinance typically has the lowest interest rate but the highest monthly payment of all refinance terms. A 10-year refinance can help you pay off your house much quicker and save on interest, but make sure you can afford the steeper monthly payment.
To get the best refinance rates, make your application as strong as possible by getting your finances in order, using credit responsibly and monitoring your credit regularly. And don’t forget to speak with multiple lenders and shop around.
When to consider a mortgage refinance
Homeowners usually refinance to save money, but there are other reasons to do so. Here are the most common reasons homeowners refinance:
To get a lower interest rate: If you can secure a rate that’s at least 1% lower than the one on your current mortgage, it could make sense to refinance.
To switch the type of mortgage: If you have an adjustable-rate mortgage and want greater security, you could refinance to a fixed-rate mortgage.
To eliminate mortgage insurance: If you have an FHA loan that requires mortgage insurance, you can refinance to a conventional loan once you have 20% equity.
To change the length of a loan term: Refinancing to a longer loan term could lower your monthly payment. Refinancing to a shorter term will save you interest in the long run.
To tap into your equity through a cash-out refinance: If you replace your mortgage with a larger loan, you can receive the difference in cash to cover a large expense.
To take someone off the mortgage: In case of divorce, you can apply for a new home loan in just your name and use the funds to pay off your existing mortgage.
Yields were near 2 week lows 2 hours before the final trades of the day, but rose several bps after that. The initial gains were driven mainly be economic data (Chicago PMI and Consumer Inflation Expectations), but the month-end trading environment is always a wild card on month-end days. If month-end buying was a factor, it would make sense to see some pull back when monthly closing levels were marked at 1pm ET. That’s exactly what we saw. Fortunately, it wasn’t a big deal for bonds or mortgage lenders. In fact, the entire week was distinctly lacking in volatility. Next week is a different animal thanks to big ticket econ data on 4 out of 5 days.
Q4 Final GDP
3.4 vs 3.2 f’cast, 4.9 prev
PCE prices 2.0 vs 2.1 f’cast
Final sales 3.9 vs 3.5 f’cast
Jobless Claims
210k vs 215k f’cast, 212k prev
Continued Claims
1819k vs 1807k prev
Chicago PMI
41.4 vs 46.0 f’cast, 44.0 prev
09:44 AM
Two way trading after 8:30am data, and now a decent response to Chicago PMI. 10yr up 2bps at 4.208. MBS down an eighth.
12:38 PM
Solid gains into the noon hour. 10yr nearly unchanged at 4.192. MBS down 2 ticks (.06).
01:33 PM
Well off the highs in after hours trading. MBS down 6 ticks (.19). 10yr up 1.8bps at 4.206.
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Mixed Performance. Data Hurt. Auction Helped. Little Changed
By:
Matthew Graham
Tue, Mar 26 2024, 4:14 PM
Mixed Performance. Data Hurt. Auction Helped. Little Changed
In the bigger picture, bonds found resistance before 10yr yields managed to break below 4.19, but remained well under the 4.32% ceiling after yesterday’s weakness. Today began slightly stronger, but shifted weaker after the Durable Goods data. The home team rallied after the 1pm Treasury auction came out on the strong side and trading levels trickled just barely into positive territory. Wednesday is the quietest day of the week for econ data, but also the last day of Treasury auctions and the last full trading day of the month/quarter. Translation: data driven volatility is unlikely, but random volatility surrounding the auctions and month-end trading could make things interesting.
Durable Goods
1.4 vs 1.1 f’cast, -6.9 prev
08:52 AM
Slightly stronger overnight and now a hair weaker after data. MBS down 2 ticks (.06) and 10yr up 0.8bps at 4.257
11:26 AM
MBS outperforming, down only 1 tick (.03). 10yr unchanged from last update.
01:09 PM
Stronger after 5yr auction. MBS up 2 ticks (.06) and 10yr down 1.1bps at 4.238
03:32 PM
Hanging out near strongest levels. MBS and 10yr at same levels as last update.
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The week got off to a weaker start with most of the losses seen during the overnight session, but gradual ongoing selling during domestic hours. There were no overt market movers behind the weakness unless we want to give credit to anxiety over the Treasury auction cycle or technical resistance. Even if auctions aren’t the source of the outright weakness, they do likely have a hand in helping MBS outperform today. 5.5 UMBS were only down about an eighth of a point while Treasuries with comparable durations had lost roughly twice as much ground (implication being that MBS don’t have to worry about 3 big supply gluts to start the week).
09:44 AM
Moderately weaker overnight and now choppy/sideways. 10yr up 3.9bps at 4.241. MBS down an eighth.
11:01 AM
Treasuries underperforming with 10yr up 4.7bp at 4.249. MBS down 5 ticks (.16).
03:35 PM
MBS continue outperforming, down only 3 ticks (.09). 10yr up 5.1bps at 4.253.
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