What Happened Last Week?
Gains Completely Erased; Stocks Looking More Culpable
Viewed in a vacuum, Friday morning’s rally remains enigmatic. There was some small case to be made that stock losses played a role, but the bond buying definitely didn’t line up with stocks in a normal way (i.e., it looked like there was some third variable that caused the bond rally to play out in a much more concentrated way). But as the day progressed, there was stronger evidence of correlation between stock prices and bond yields. Specifically, a sharp rebound in stocks at the 9:30am NYSE open coincided with an equally sharp reversal in bonds. Yields ultimately leveled off 2.5-3bps higher on the day with MBS spending the afternoon in just barely weaker territory.
Source: Matthew Graham, Mortgage News Daily 11/14/2025)
What’s on the Agenda for This Week?
Overview
This is a busy week as there will finally be some jobs data.
Three Things
The three areas that have the greatest ability to impact MBS backend pricing this week are: (1) Jobs, Jobs, Jobs, (2) The Talking Fed and (3) Treasury Dump.
(1) Jobs, Jobs, Jobs: There will finally be a jobs report out of the BLS. It will hit on Thursday and will be for September. So, it’s quite old data but it fills a big void. This week will be Initial Jobless Claims, Continuing Claims, ADP weekly, NFP, Unemployment Rate, Average Hourly Earnings, Average Hourly Workweek, U6 Underemployment Rate, and Laborforce Participation Rate.
(2) The Talking Fed: This is another week with a lot of Fedspeak. So far, they seem split on a rate cut in December while keeping the door open for one at the same time.
- 11/17: Williams, Jefferson, Kashkari, Waller
- 11/18: Logan, Barr, Barkin
- 11/19: FOMC Minutes, Atlanta Fed Business Inflation Expectations
- 11/20: Hammack, Goolsbee
- 11/21: Williams, Logan
(3) Treasury Dump: There is an important 20-year Treasury Bond auction on Wednesday. Experts are also monitoring the huge amount of corporate bonds being issued which is a direct competitor for investor dollars versus MBS.
Market Wrap-up
Rosie the Riveter: The November regional Fed Empire Manufacturing Index was a welcome surprise, improving by 18.7 versus estimates of 5.8. Prices Paid moderated as well.
On Deck for Tomorrow: NAHB Home Builders’ Sentiment, ADP Weekly Employment.