What Happened Last Week?
10-Year Yields Finally Break the Range
Despite an absence of market movers on the calendar, bonds found a reason to move. In fact, 10-year yields staged their first legit breakout from the narrow trading range of the past 4 months. Whether that has any implications for the future is a debate for technical analysts to have with fundamental traders. There was an extra little jolt of mid-day weakness when Trump suggested Hassett was out of the running for the Fed Chair nomination, but the day’s bond losses would still be better characterized as gradual and non-event-driven. MBS outperformed yet again for the same old reason (actual and/or anticipated GSE MBS purchases), but nonetheless ended the week at the lows.
Source: Matthew Graham, Mortgage News Daily 1/16/26)
What’s on the Agenda for This Week?
Domestic Flavor
Taking it to the House: Another banner week for Mortgage Applications which rose by 14.1%. Refinances were up 20.4% and Purchases were up 5.1%. Pending Home Sales Index is also today.
Bob the Builder: Two months’ worth of Construction Spending will be issued today.
Treasury Dump
There is an important 20-year Treasury bond auction at 1pm EST today.
Geopolitical
President Trump is speaking at the World Economic Forum in Davos. The markets are also waiting for the Supreme Court’s ruling on tariffs.
Market Wrap-up
Treasury Dump
There was an important 20-year Treasury Bond auction at 1 pm.