Weekly Mortgage Overview: 8/19/2024

By August 19, 2024Mortgage Overview

What Happened Last Week?

Calmer Week, But Are Storms Brewing?

By the time the week’s CPI data came in as expected, it was highly unlikely that the week would live up to the volatile legacy of the previous two weeks. Thursday’s jobless claims / retail sales combo did its best to stir the economic pot, but bonds weren’t interested in panicking. Treasuries followed European yields lower overnight and then drifted back toward unchanged levels before ending the day in stronger territory. All told, the entirety of the week’s trading session would fit inside NFP Friday from 2 weeks ago… This week’s focus is on Fed Chair Powell in the event he offers any clarification or setting of the stage for the September rate cut.
Source: Matthew Graham, Mortgage News Daily 8/16/2024)

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) The Talking Fed, (2) Geopolitical and (3) Treasury Dump.

(1) The Talking Fed: The Federal Reserve will be the dominant force this week with the release of the Minutes from the last FOMC Meeting and Kansas City Federal Reserve’s Jackson Hole Wyoming Economic Symposium that officially kicks off on Thursday. Fed Chair Powell will speak on Friday.

(2) Geopolitical: The ramp-up in Ukraine/Russia will have a lot of market attention as will Israel/Iran as any escalation will drive money into bonds.

(3) Treasury Dump: There is an important 20-year Treasury bond auction on Wednesday.

Market Wrap-up

Leading Down: The July Leading Economic Indicators (LEI) dropped by 0.6% which was twice as bad as the forecasts calling for -0.3%.

On Deck for Tomorrow: PBOC Interest Rate Decision, Talking Feds Barr and Bostic.