What Happened Last Week?
Some Volatility Surrounding Headlines, But Not Much Change
Bonds began the day Friday roughly flat before losing ground modestly into the 9am hour as markets mis-read headlines regarding new peace proposals submitted by Iran. But just before 10am, similar headlines resurfaced including the claim that Iran’s new proposal made concessions regarding Iran’s nuclear aspirations. This accounted for a swift move into positive territory that was only partially reversed after Trump said he wasn’t satisfied with the latest proposal despite acknowledging progress in the peace talks. The net effect was a bond market that was roughly unchanged. As has been the case, any major progress toward peace (or any major escalation) could result in trading levels being drastically different this week.
Source: Matthew Graham, Mortgage News Daily 5/1/26)
What‘s on the Agenda for This Week?
Overview
The week starts under pressure due to higher oil prices.
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) The Talking Fed.
(1) Geopolitical: Iran and oil prices will continue to be significant drivers in bond yields this week as the headlines will generate more market volatility than economic data will.
(2) Jobs, Jobs, Jobs: There is a ton of job and wage related data all week long culminating in Big Jobs Friday. These include: JOLTS, ISM, ADP, Challenger Job Cuts, Initial Weekly Jobless Claims, Unit Labor Costs, NonFarm Payrolls, Unemployment Rate, Average Hourly Earnings and more.
(3) The Talking Fed: A ton of Federal Reserve representatives will speak this week. The bond market will give more weight to voting members.
Market Wrap-up
Rosie the Riveter: The March U.S. Factory Orders came in hot, jumping 1.5%, which was three times higher than the consensus estimates of 0.5%. Plus, February was revised higher as well.
On Deck for Tomorrow: JOLTS, ISM Services PMI, Trade Balance, New Home Sales.