What Happened Last Week?
From 8% to Under 7.5%, Mortgage Rates Had a Near-Record Week
The average top tier 30-year fixed mortgage rate was over 8% as recently as October 19th. At the start of last week, things weren’t much better at 7.92%. What a difference a few days make–especially the last 3. The improvement seen on Wednesday to Friday is the third biggest in well over a decade.
Source: Matthew Graham, Mortgage News Daily 11/3/2023)
What’s on the Agenda for this Week?
Overview
Last week was a very pivotal week with a lot of central bank action and big name economic data. This week is going to see much fewer events.
Three Things
The three areas that have the greatest ability to impact MBS backend pricing this week are: (1) The Talking Fed, (2) Treasury Dump and (3) Across the Pond.
(1) The Talking Fed: After last week’s “dovish” FOMC, the bond market will be paying close attention to this week’s barrage of Fed speakers to determine if more weight will be put behind the “Fed is done” trade.
- 11/07: Schmid, Willams, Logan
- 11/08: Powell, Cook, Williams
- 11/09: Bostic, Barkin, Paese
- 11/10: Logan, Bostic
(2) Treasury Dump: There is a huge amount (second most on record) of longer term debt hitting the market this week that will need to be absorbed. Experts will pay very close attention to the 30Y bond auction.
- 11/07: $48B 3-year note.
- 11/08: $40B 10-year note.
- 11/09: $24B 30-year bond.
(3) Across the Pond: There will be key inflationary data out of China, Germany and the Eurozone, and GDP out of Great Britain.
Market Wrap-up
Overview
There were no domestic events today.
On Deck for Tomorrow
Australia Interest Rate decision, Trade Balance, 3-year Treasury note auction.