The ISM Services PMI is this morning’s key data, and arguably, the most relevant economic report of the week. Last week’s ISM Manufacturing data wasn’t strong, but it wasn’t nearly as weak as traders were prepared to see. Today’s services PMI is in the same vein–coming in higher than expected at the headline level and offering no relief on prices. The result is a modest extension of the selling pressure seen over the past few days. Yields are now back at the top of the March range. As the week continues, the Treasury auction cycle and Fed announcement are the remaining key events.

President Donald Trump’s proposed budget would nix funding for Community Development Financial Institutions in minority heavy areas while expanding it for rural areas.

Atlantic Trust Mortgage was recently dealt another legal blow after a federal judge in Michigan refused to dismiss UWM’s All-In lawsuit against the brokerage.

The administration is pitching a $26.7 billion reduction to the regulator’s funding for rental assistance, public housing and elderly and disability housing.

Even though Motto Mortgage has 8% fewer open offices than a year ago, executives touted franchise renewals with owners committing to another seven years.

The tool’s launch comes as various sources report growth in both serious borrower delinquencies and foreclosure activity over the first few months of 2025.

Data Dependence is Back, But Not in A Fun Way

Bonds definitely paused their long term relationship with economic data in wake of the tariff announcement in early April, which was logical given the headline-drive volatility and uncertainty. 2 weeks ago, the connection looked to be returning.  Now over the past 2 days, it’s back with a vengeance.  It’s not that any of the data has been stunningly strong, but it’s been much better than what some market participants were prepared to see.  Friday’s jobs report is the 2nd time in 2 days where traders have been able (or forced?) to reconcile their more dire fears with a less dire reality. Translation: higher stocks, higher yields.  More big ticket data on the way on Monday…

Econ Data / Events

Nonfarm Payrolls

177k vs 130k f’cast, 185k prev
last month revised down from 228

Unemployment Rate

4.2 vs 4.2 f’cast, 4.2 prev

Participation rate 

up 0.1% (bad for bonds)

Market Movement Recap

08:36 AM Losing some ground after jobs report.  MBS down about an eighth and 10yr up 5.5bps at 4.271

11:31 AM More selling.  MBS down just over a quarter point and 10yr up 8.8bps at 4.305

12:06 PM More weakness.  10yr up 10.6 bps at 4.323.  MBS down 9 ticks (.28).

03:57 PM Off the weakest levels, but still weak.  MBS down a quarter point and 10yr up 9.3bps at 4.31

In a recent interview, Bill Pulte claimed he’s signed 80 orders for the agency, although only a dozen have been made public via his social media feed.

The company reported a profitable first quarter and called for loosened regulation to bring more private capital into home finance in its latest earnings call.

ICE Mortgage Technology also added 20 new Encompass clients in the first quarter, but the unit still had an operating loss for the period, its 10th in a row.