Weekly Mortgage Overview: 9/26/2022

By September 26, 2022Mortgage Overview

What Happened Last Week?

Let’s Talk About Whether It’s Time to Talk About Some Resilience

A large, rapid-rate spike is frequently one of the best early indicators for at least some small token of a corrective rally. Even in the early 2022 rate spike, there were several opportunities for passengers to disembark on the way up – 5 to 7 days here and there where rates were sideways to slightly lower. In the current case, rates haven’t strung together more than 3 days of improvement since July. With the last two days of last week adding an unexpectedly traumatic level of insult to injury, is it finally time to entertain a bounce – even if it’s not a sustained, epic bounce?
Source: Matthew Graham, Mortgage News Daily 9/23/22)

What’s on the Agenda for this Week?

Overview

This is a very pivotal week.

Three Things

The three areas that have the greatest ability to impact mortgage backed securities backend pricing this week are: (1) Inflation Nation, (2) Rosie the Riveter and (3) The Talking Fed.

(1) Inflation Nation: The Fed’s preferred inflation measure will be issued on Friday. The problem is that both Core PCE and Headline PCE are expected to move higher in this latest release.

(2) Rosie the Riveter: There is a big dose of manufacturing data this week with Durable Goods Orders, Chicago PMI and the Richmond Fed.

(3) The Talking Fed: Now that the media blackout is over, a slew of Feds will speak this week:

  • 09/26: Susan Collins, Raphael Bostic, Loretta Mester
  • 09/27: Charles Evans, James Bullard, Mary Daly
  • 09/28: Raphael Bostic, James Bullard, Charles Evans, Jerome Powell
  • 09/29: Loretta Mester, Mary Daly
  • 09/30: Lael Brainard, John Williams

Market Wrap-up

Domestic Flavor

Treasury Dump: There was a DISMAL 2-year note auction today at 1 pm ET. $43B went off at a high yield of 4.290% with a bid-to-cover ratio of 2.51.

Across the Pond

Great Britain: The bond carnage continues due to speculation out of England of more tax cuts and more rate hikes…both heading into a recession.

On Deck for Tomorrow

Durable Goods Orders, Case Shiller Home Prices, FHFA Home Price Index, Richmond Fed Manufacturing Index, New Home Sales, Consumer Confidence, 5-year note auction and Fed Chair Powell.