Two factors had been contributing more than others to drive bond yields higher as of yesterday.  The broader, ongoing factor is/was the tariff/trade stand-off with China. Whether approached through the lens of inflation or decreased foreign appetite for USD assets (a byproduct of decreased consumption of foreign imports), excessive tariffs have not been good for bonds.  The more timely factor was Trump’s tirade against the Fed Chair last Thursday and again on Monday.  Global markets sold USD assets in response.  Then in the blink of an eye last night, Trump said he’s not really thinking of firing Powell AND that tariffs on China won’t be as high as initially announced.  USD assets rallied and they continue to rally this morning.  The end. 

Chairman and CEO David Spector, in weighing Rocket Cos.’ purchase of Mr. Cooper, suggested Pennymac’s balanced business model couldn’t be duplicated.

Don Layton, former Freddie Mac CEO, and self-proclaimed “GSEologist” predicts that a release of the two entities will occur within four to six years.

Moody’s Corp., a company that grades bonds and analyzes corporations’ financial performance, said it expects to earn less this year than it had previously forecast.

The Sunshine State deal comes following a banner year for credit union-bank combinations, despite pushback from community banking advocates.

A large share of each generation, baby boomers, Gen X, Millennials and Gen Z, said another age group is the reason why homeownership is unaffordable, Clever found.

Broadly Sideways Despite Intraday Volatility

Shorter term bonds lost ground today while longer term bonds and MBS managed a modest victory. While this isn’t really a victory considering the mixed performance, it was better than a sharp stick in the eye.  Moreover, MBS were able to outperform–something that is not at all uncommon on the first few days of a Treasury auction week.  In the bigger picture, yields are hugging the upper boundary of a trend that would seem fairly boring and only slightly weaker over the past few months after breaking sharply below and above that trend after the tariff announcement drama. 

Econ Data / Events

Leading Indicators

-0.7 vs -0.5 f’cast, -0.3 prev

Market Movement Recap

09:50 AM Moderately stronger overnight after initial weakness. MBS up 5 ticks (.16) and 10yr down 4.378.

01:15 PM Fairly weak 2yr auction.  Some additional selling, but still stronger on the day.  MBS up 6 ticks (.19) and 10yr down 2.2bps at 4.387

03:30 PM Sideways near same levels.  MBS up 5 ticks (.16) and 10yr down 1.5bps at 4.395

The homebuilder agreed to acquire Alliant National in a transaction announced last October, with this deal closing after the Cherry Creek mortgage purchase.

The cost-cutting task force could impact the congressionally chartered nonprofit which provides grants and lending for both homeowners and renters.

The partnership between alternative investment managers adds to signs investors see the private mortgage market as attractive, albeit not immune to risk.