What Happened Last Week?
Roughly Unchanged After Gradual Weakness
Bonds ended the day Friday roughly unchanged despite the morning’s stronger start. With the S&P falling back to the lows of the day, one can’t really blame asset allocation trading between stocks and bonds. It’s easier to blame a mid-day surge in fuel prices (especially after 11am) which may have been related to headlines regarding U.S. missiles striking an oil tanker docked at Kharg Island. All told, it was still a victorious week with yields ending up slightly lower than the previous Friday. This week is marked by limited data and the pre-FOMC blackout period. Bonds will remain tuned into oil price volatility and potentially to any big swings in stocks.
Source: Matthew Graham, Mortgage News Daily 7/17/26)
What’s on the Agenda for This Week?
Overview
The only area that will have the greatest ability to impact MBS backend pricing this week is Geopolitical. That’s it. This will continue to dominate global long bond yields as another key oil route in the Red Sea is being threatened.
This is a VERY LIGHT week for economic data with not a single tier-1 release that could impact pricing. This is the FOMC’s Media Blackout period leading up to next week’s FOMC Rate Decision, so there will be no speeches to react to.
Treasury Dump
There is an important 20-year Treasury Bond auction on Wednesday.
Market Wrap-up
Texas Tea, Black Gold: WTI jumped over a buck to $83.50.
Central Bank Palooza: The People’s Bank of China kept their interest rate at 3.00%.
On Deck for Tomorrow: ADP 4-week moving average.