Although this morning contained the week’s most active slate of economic data, it has completely failed to inspire even the most modest of responses in the bond market, both in terms of volume and volatility.  Disclaimer: there is some chance of a reaction to the monthly PCE data which did not come out at 8:30am as it normally would and is instead rescheduled for 10am ET. Bonds were stronger overnight with most of the gains coinciding with the start of the European trading session (weaker data in Europe helping bonds). There’s been no movement so far during domestic hours. Some traders are also pointing to month-end buying as a source of support for bonds over the past 3 days.

U.S. lumber prices, which already have risen in recent months due to lower production in Canada, could see further gains after President-elect Donald Trump’s proposed tariffs on trade from north of the border.

New single-family home sales decreased 17% last month to a 610,000 annualized rate, according to government data issued Tuesday.

The median monthly payment amount for new purchases moved higher for the first time in six months, according to the Mortgage Bankers Association.

Southern Trust Mortgage claims its former LO, now employed with Movement, stole thousands of confidential files and its customers.

Expanded data shows home prices rose over 5% annually at the end of the third quarter, prompting the FHFA to boost mortgage loan limits accordingly.

No Major Data. No Major Drama

While today’s economic calendar was not necessarily “empty,” it may as well have been in terms of market movement potential.  Home prices came in hotter according to FHFA, but bonds never care about home price indices (apart from the housing meltdown, perhaps). Same story for new home sales which tanked due to Hurricane Milton. Consumer confidence and the 5yr auction were right in line with expectations, thus leaving only the Fed Minutes at 2pm.  The Fed couldn’t possibly have said anything interesting 3 weeks ago that we haven’t already heard several of them say in the past 3 weeks.  Therefore, it was never likely to inspire bond market movement. We’re left with a modest correction to yesterday’s rally and a day of mostly flat trading into the 3pm CME close.  Wednesday could be a bit jumpier depending on the data and month-end trading uncertainty. 

Econ Data / Events

FHFA Home Prices

0.7 vs 0.3 f’cast, 0.4 prev

Case Shiller Home Prices

-0.3 vs -0.3 prev

Annual Case Shiller Prices

4.6 vs 4.8 f’cast, 5.2 prev

Annual FHFA Home Prices

4.4 vs 4.4 prev

New Home Sales

610k vs 730k f’cast

Consumer Confidence

111.7 vs 111.3 f’cast

Market Movement Recap

09:12 AM Bonds drift sideways to slightly weaker overnight.  MBS down only 2 ticks (.06) and 10yr up 2.2 bps at 4.296

10:25 AM Off the AM highs with MBS now down 6 ticks (.19) and 10yr yields up 4.4bps at 4.319

01:03 PM Ho hum 5yr auction. Bonds little changed ad modestly weaker levels.  MBS down 5 ticks (.16) and 10yr up 3.1bps at 4.307

02:05 PM No response to Fed minutes and no change to levels from the last update

Government securitization guarantor Ginnie Mae got the terms for the popular HMBS 2.0 program across the finish line ahead of a major change in federal leadership.

The Department of Justice suggested that new buyer broker agreements resulting from a National Association of Realtors settlement may violate antitrust laws.

“If he manages to get through the policies that he’s proposing, that will be really bad news,” says Desmond Lachman, an economist at the conservative American Enterprise Institute.