Weekly Mortgage Overview: 2/12/2024

By February 12, 2024Mortgage Overview

What Happened Last Week?

Uneventful Ceiling Defense

On a day where 10-year Treasury yields bounced multiple times at the 4.19% technical level, and considering the recent relevance of that particular level, one might expect to find that the intraday trading story was interesting or exciting. This could possibly be argued for the early Friday morning trading surrounding the release of CPI seasonal revisions, but that played out in a matter of minutes and had nothing to do with 4.19%. The rest of the day was spent grinding sideways just under that ceiling. MBS did slightly better than Treasuries due to the monthly UMBS 30-year settlement process (not a reliable pro or con, but a pro this time around).
Source: Matthew Graham, Mortgage News Daily 2/9/2024)

What’s on the Agenda for this Week?

Three Things

The three areas that have the greatest ability to impact MBS backend pricing this week are: (1) Inflation Nation, (2) The Talking Fed and (3) Retail Sales.

(1) Inflation Nation: Last week the Bureau of Labor Statistics completed their annual recalibration (called a “seasonal adjustment”) of how they calculate CPI. Now, this week we will get CPI on Tuesday and PPI on Friday. The CPI can have a major impact on pricing.

(2) The Talking Fed: The bond market will continue to try to hedge their bets on the timing of a change in policy from the Federal Reserve. Here is this week’s speaking schedule:

  • 02/12: Kashkari, Barkin
  • 02/14: Goolsbee, Barr
  • 02/15: Bostic, Waller
  • 02/16: Daly, Fed’s Monetary Policy Report

(3) Retail Sales: After a big pull-back in Consumer Credit, there is concern over this week’s Retail Sales report for January with the headline expectations looking for a contraction of -0.1%.

Market Wrap-up

There were no economic events today.

On Deck for Tomorrow: CPI and Core CPI, Small Business Optimism Index.