Surprisingly Light Volatility

Surprisingly Light Volatility Bonds digested several big ticket economic reports as well as a host of war-related headlines that probably would have caused a much bigger reaction a few weeks ago. But the net effect was an almost perfectly flat day by the 3pm CME close. If anything, the data caused some weakness and we can say bonds would have rallied more noticeably otherwise. The weak response is no surprise considering all 3 reports were stronger than expected. This also serves as a reminder that Friday's jobs report is still a relevant market mover despite a general focus on the war and energy prices.  Econ Data / Events ADP Employment 62k vs 40k f'cast, 63k prev Retail Sales 0.6 vs 0.5 f'cast, -0.2 prev Core Retail Sales 0.5 vs 0.3 f'cast, 0.2 prev ISM Manufacturing 52.7 vs 52.5 f'cast ISM Prices Paid 78.3 vs 73.0 f'cast, 70.5 prev Market Movement Recap 08:24 AM slightly stronger overnight with a bit of selling after ADP. MBS still up an eighth and 10yr down 1.3bps at 4.301 08:38 AM Giving up gains after Retail Sales. MBS unchanged and 10yr up half a bp at 4.317 11:04 AM Recovering some ground now. No particular reason. MBS up an eighth and 10yr down 1.2bps at 4.301 01:43 PM MBS up about an eighth and 10yr roughly unchanged at 4.313 03:23 PM MBS up only 2 ticks (.06) and 10yr up 1.6bps at 4.33

Mortgage Rates Steady to Slightly Lower

Mortgage rates were little-changed on Wednesday, despite the release of several economic reports and another deluge of war-related headlines. In the slightly bigger picture, the market is trading with some sense of hope of a finite timeline for the war. Today, that meant a moderate drop in oil prices and bond yields (aka "rates"). Bonds struggled to maintain the improvement after this morning's economic reports which were broadly stronger than expected. In general, stronger econ data suggests higher rates, all else equal. In addition to stronger employment and retail sales reports, a key manufacturing report showed much higher inflation--also something that pushes rates higher. All of the above having been said, there really wasn't a major reaction to any of this morning's scheduled events/reports. If anything, bonds and rates have been roughly sideways in a narrower-than-average range. The average mortgage lender was lower than yesterday by 0.02% on a top-tier 30yr fixed rate.