Equity is entitled to a little over $70,000 worth of damages.

State and local governments borrowed nearly $9 billion for affordable housing so far this year — the most for the period in at least a decade.

There are probably only a few 4-day streaks with effectively no movement in mortgage rates, and this is one of them.  After falling to 6.91% last Friday, the MND rate index hasn’t moved more than 0.01%. Granted, some lenders have been higher or lower during that time, but they offset each other in such a way that the average stayed flat. There’s no special significance to this development.  It’s more of a trivia novelty.  If we were determined to assign meaning, we could say that the flat performance is evidence that the rate market is fraught with uncertainty as it waits to see how the next round of significant economic data will shape the next trend.  Markets don’t have to wait much longer as the more relevant reports start rolling in next Monday.  As for this week, there are several middle tier reports on Thursday morning, and then markets are closed on Friday.

Treasury Auction Relief Rally and Month-End Support

With Thursday being a half day before a 3.5 day weekend, it’s entirely reasonable to suspect month-end trading helped the bond market today.  There’s never a great way to know if it will help or hurt, but it’s a common hindsight conclusion when markets are moving without any other salient provocation.  Speaking of provocation, the 7yr Treasury auction provoked a bit more buying in the afternoon.  It also helped underscore the Treasury outperformance of MBS after 2 previous days of underperformance (i.e. the market was making room for the auctions and it found that it had plenty).  Thursday is the busiest day of econ data of the week.  None of the data is top tier, but it could be enough to shake things up in the AM hours. 

Market Movement Recap

10:26 AM Modestly stronger overnight.  MBS up 2 ticks (0.06) and 10yr down 1.6bps at 4.222.

11:36 AM Additional gains heading into the 11am hour.  MBS up 3 ticks (.09) and 10yr down 3.2bps at 4.206

01:03 PM 7yr auction was slightly stronger than expected.  Bonds rallying a bit more.  MBS up 5 ticks (.16).  10yr down 5.2bps at 4.186

03:24 PM MBS still up 5 ticks (.16).  10yr down 4.4bps at 4.194

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There are no significant economic data on tap today.  The only notable event is the 7yr Treasury auction (the last of the week) and it’s a bit of a stretch to refer to a 7yr auction as “notable.”  Far more interesting were the overnight developments in Japan, resulting in a 34yr low for Yen vs the dollar.  Yen weakness has often precipitated selling of USD-denominated assets (like Treasuries) by the bank of Japan. This is never enough to completely change a trend in US rates, but it has added volatility at times.  In light of that news overnight, waking up to modest gains this morning is a victory.
Here’s the longer-term relationship between rates and Yen:

There are certainly other variables in play that contribute to this generally inverse relationship and there is certainly plenty of variation over shorter time horizons.  Today has proven to be a good example.  The actual phenomenon of long-term lows for Yen was not a huge deal as it was just a small extension of existing weakness.  Moreover, investors who’d been worried about negative comments from the Bank of Japan (BOJ) were instead treated to a more moderate approach.

In other words, there are past examples of major Yen weakness that result in the BOJ saying it will take measures to bolster the Yen.  Those “measures” are either explicit promises to sell USD-denominated assets or they’re vague comments that are assumed to be the same.  In today’s case, there were no such comments–at least not yet.  The BOJ and Japan’s Ministry of Finance will be meeting at 6:15pm ET to discuss an official response to Yen weakness. 
How much could that impact Treasuries?  That remains to be seen, but it wouldn’t be nearly enough to counteract any cohesive message in domestic economic data.  In other words, it would just add noise to the front line market movers for US rates. 

The Mortgage Bankers Association said its Market Composite Index moved lower last week, apparently indifferent to a slight improvement in mortgage interest rates. The Index, which measures loan application volume, decreased 0.7 percent on a seasonally adjusted basis from one week earlier.  On an unadjusted basis, the Index declined 0.4 percent compared with the previous week. The Refinance Index decreased 2.0 percent from the previous week and was 9.0 percent lower than the same week one year ago. The refinance share of mortgage activity accounted for 30.8 percent of total applications compared to 31.2 percent the previous week. [refiappschart] The Purchase Index ticked down 0.2 percent both before and after its seasonal adjustment.  It was 16.0 percent lower than the same week one year ago. [purchaseappschart] “Mortgage application activity was muted last week despite slightly lower mortgage rates. The 30-year fixed rate edged lower to 6.93 percent, but that was not enough to stimulate borrower demand,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “Purchase applications were essentially unchanged, as homebuyers continue to hold out for lower mortgage rates and for more listings to hit the market. Lower rates should help to free up additional inventory as the lock-in effect is reduced, but we expect that will only take place gradually, as we forecast that rates will move toward 6 percent by the end of the year. Similarly, with rates remaining elevated, there is very little incentive right now for rate/term refinances.” 

Despite pressure from the Consumer Financial Protection Bureau, the embattled Appraisal Foundation tapped its longtime second-in-command to be its next president.

A series of changes to the Telephone Consumer Protection Act go into effect on March 26 that closes the so-called “lead generation loophole” for telemarketing calls and texts.

At the height of the Canadian boom, banks handed out 40% more home loans than pre-pandemic. Half were variable-interest rate mortgages subject to certain risks.