What Happened Last Week?
Perfectly Acceptable Conclusion to a Potentially Volatile Week
With markets closed for the Juneteenth holiday on Friday, Thursday marked the end of the trading week. Considering the sell-off on Wednesday afternoon, the week had the potential to end on an uncomfortably volatile note. Instead, bonds pushed back nicely in the other direction–even though MBS didn’t recoup as much of their losses as 10-year Treasuries. True, there is some sense of foreboding in the inability of 10-year yields to move below 4.42%, but all told, the week was actually surprisingly calm after factoring in Thursday’s gains.
Source: Matthew Graham, Mortgage News Daily 6/18/26)
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) Inflation Nation, (2) Geopolitical, and (3) The Talking Fed.
(1) Inflation Nation: The Fed’s key measure of inflation will be on Thursday with PCE and Core PCE, along with Personal Incomes and Spending. The Core YOY PCE is expected to rise from 3.3% to 3.4%; any reading above that will be very negative for pricing.
(2) Geopolitical: It appears that things are still moving forward with Iran/US, which of course can change quickly, and long bonds will be sensitive to any meaningful changes in trajectory. UK has lost its PM.
(3) The Talking Fed: Former Chair Alan Greenspan has passed away at the age of 100. This week will place heavy weight on the messaging from the Fed speakers after last week’s FOMC meeting and the emphasis on inflation.
Market Wrap-Up
There were no economic releases today.