What Happened Last Week?
Some Resilience After AM Weakness
Ten-year yields were set to end the week at the highest levels since last July, but those were even higher highs earlier Friday morning. From roughly 9am-1130am ET, bonds recovered all of the day’s losses in a move that was led by adjustments to Fed rate hike expectations. Yes, it should be called that now because there are no longer any rate cut expectations based on futures trading. Instead, there’s indecision about holding steady vs a small chance of rate hikes. War headlines remain the dominant focus and weekends continue to offer a higher concentration of risk for financial markets.
Source: Matthew Graham, Mortgage News Daily 3/27/26)
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) Geopolitical, (2) Jobs, Jobs, Jobs and (3) Retail Sales.
(1) Geopolitical: This has been and will continue to be the dominant force in all marketplaces for several weeks if not months.
(2) Jobs, Jobs, Jobs: Big Jobs Friday will be just before an early market close. Throughout the week will be some form of job and wage related data ranging from ISMs to Weekly Claims.
(3) Retail Sales: The top of the food pyramid.
Market Wrap-up
Rosie the Riveter: The March Dallas Fed Manufacturing Survey dropped from 0.2 down to -0.2.
The Talking Fed: Fed Chair Powell said the Fed can “wait and see” how the Iran conflict affects inflation.
On Deck for Tomorrow: Case Shiller HPI, FHFA Housing Price Index, Chicago PMI, JOLTS, Consumer Confidence.