Weekly Mortgage Overview: 3/22/2021

By March 22, 2021Mortgage Overview

What’s on the Agenda for this Week?

Three Things

The three areas that have the greatest ability to impact backend pricing this week are: (1) The Talking Fed, (2) Domestic Flavor and (3) Treasury Dump.

(1) The Talking Fed: Fed Chair Powell will speak three times this week as well as Treasury Secretary Yellen and a bevy of other Talking Feds. The bond markets will continue to focus on discussions around operation “twist” and when the tapper might occur. Both scenarios were very much sidestepped in last week’s Fed policy. Here is this week’s schedule:

03/22: Powell, Barkin, Daly, Quarles and Bowman
03/23: Powell, Bullard, Bostic, Barkin, Brainard and Williams
03/24: Powell, Barkin, Williams, Daly, and Evans
03/25: Williams, Clarida, Bostic, Evans and Daly

(2) Domestic Flavor: The biggest economic release will be on Friday with the PCE data along with income and spending. But throughout the week will be Durable Goods Orders, revised GDP, and Jobless Claims to focus on.

(3) Treasury Dump: There are three shorter term auctions this week but one of those is the 7-year note. Last month was the worst 7-year note auction on record that sent MBS pricing spiraling lower as all interest-sensitive products took notice. Here is this week’s schedule:

03/23: 2 year note
03/24: 5-year note
03/25: 7 year note

Market Wrap-up

Domestic Flavor

The Talking Fed: Fed Chair Powell spoke this morning but his topic was Innovation and Central Banks which focused on the future of digital currency discussion. He said that crypto “currencies” like Bitcoin are not a form of payment and is more of competitor to gold as a riskier asset than as to the dollar as a currency. He did not discuss the economy or anything that would impact bonds.

Taking it to the House: February Existing Home Sales were up 9.1% on YOY basis but were down 6.6% on a MOM basis as super low inventory levels and rising interest rates impacted sales.

On Deck for Tomorrow: Fed Chair Powell, New Home Sales, Richmond Fed Manufacturing, 2YR Treasury Note auction.

Central Bank Palooza

The Peoples Bank of China kept their key interest rate at 3.85%.