Modest Gains Maintained After Intraday Slippage

Slippage is a bit less severe than leakage. Neither of them will turn a green day red, but they both erode morning gains. Today’s gains primarily followed a pre-market comment from Trump who said the US was in the middle of final negotiations to end the Iran war. Bonds hit their best levels shortly thereafter and then the slippage set in. The backtracking was more evident in Treasuries with the 10yr losing almost half of the day-over-day gains. MBS managed to hold firmer, and were still broadly in line with the middle of the AM range by 4pm. Friday brings the jobs report. While it hasn’t been as big of a flashpoint recently, we’d never rule out a reaction in the event of a big beat/miss.

Econ Data / Events

Jobless Claims (May)/30

225K vs 213K f’cast, 215K prev

Market Movement Recap

08:42 AM Decently stronger overnight and no drama so far. MBS up 7 ticks (.22) and 10yr down 4.1bps at 4.455

11:34 AM Sideways so far and just a hair weaker.  MBS still up 6 ticks (.19) and 10yr down 3.1bps at 4.465

03:31 PM Treasuries near weakest levels but 10yr still down 2.5bps at 4.471. MBS still up 6 ticks (.19).

The following newswire hit about an hour before the open: TRUMP: US IN THE MIDDLE OF FINAL NEGOTIATIONS TO END IRAN WAR.  Bond yields and oil prices had already fallen modestly up to that point, but more than doubled the overnight rally after that. Yields are thus starting the day roughly 4bps lower, perfectly erasing the entirety of Wednesday’s losses. Jobless Claims had no impact at 8:30am ET. An hour earlier, Challenger Layoffs possibly moved the needle microscopically, but it’s just as likely that the ongoing drop in oil prices did the trick. There’s no other big ticket data for the day, so we’re headline watching and waiting for Friday’s jobs report.

Lender and Broker Products, Software, and Services There’s been plenty of chatter lately about lenders trying to rebuild realtor referral pipelines. One company may have found a different angle. Inside Real Estate (yes, the company that bought BoomTown) has quietly launched a new lead solution designed specifically for lenders focused on agent relationships. Consumers enter looking for both financing guidance and help finding a home, creating opportunities for lenders to engage early in the process and strengthen agent partnerships. Several participating lenders have reportedly received qualified applications within days of launch, while also generating new conversations with referral partners. BoldTrail already powers lead generation and nurture for the largest real estate brands and is the chosen partner for more than 400k agents and 14k LOs nationwide. One catch: markets are exclusive… Might be worth checking if your market is still open. Schedule a call or Email/text Mike Ensch at 562-644-2373. Are you making the most of every borrower relationship? Could your retention strategy be working harder for your business? In today’s market, retention takes more than a first-lien mortgage strategy. Lenders looking to strengthen long-term borrower value are turning to HELOCs and HELOANs to support growth across market cycles. Join FirstClose VP of Client Success Andria Lightfoot and Optimal Blue PPE Solution Specialist Cheri Wolfe on June 10 at noon CT for a webinar on building a smarter retention strategy through home equity lending. You’ll learn why these products matter, how pricing consistency can support scalable execution, and how originators can identify opportunities at the point of sale. Register now to strengthen your retention strategy and drive more value from every borrower relationship.

MBS buying’s future and what Bill Pulte’s new additional role portends are among issues coming into focus, panelists and attendees at an IMN conference said.

In addition expanding the types of loans eligible for the reverse product, the policy creates a flexible borrower counseling timeline to facilitate lending.

Treasury Secretary Scott Bessent downplayed senators’ concerns about higher costs for Americans, noting average yearly inflation is lower than during the pandemic, while also confirming acting Attorney General Todd Blanche’s Tuesday claim that the administration will not move forward with a $1.8 billion “anti-weaponization fund.”

The Federal Reserve’s former top regulator said recent efforts to reform regulation and supervision have boosted executive compensation and share buybacks, not the broader economy.

Those who looked to sell their properties during May listed at a price 2.4% lower, as they take into account current conditions instead of being overoptimistic.

Imagine being stuck at home watching TV for 3 months and only being able to stream one show. That’s been the case for the bond market (which dictates interest rates) since the beginning of March. The show in question involves watching war-related headlines and reacting in roughly the same manner as oil prices. Today’s episode was more interesting than yesterday’s. Key details included reports of Iranian missile strikes on various U.S. and allied targets. In general, rates have improved on news that increases the odds of a peace deal. Unsurprisingly, today’s headlines (technically, yesterday night, but reflected in today’s rate movement) did the opposite. Thanks to headline fatigue and desensitization, the rate market has been responding with less volatility over the past few weeks. As such, today’s increase was fairly modest in the big picture but nonetheless leaves rates near their highest levels in more than 9 months. [thirtyyearmortgagerates]

Minimal Change After Overnight Volatility

War headlines struck back in the overnight session. Specifically, Iran struck back against various U.S. and allied sites, allegedly in response to U.S. strikes on Iranian sites. Peace prospects take an obvious hit in response to these escalations and financial markets remain willing to react accordingly. Oil prices were already moving up to the highest levels in more than a week in the overnight session and that momentum peaked at 6am ET. Treasury yields followed and then stayed broadly sideways for the duration of the domestic session. In the bigger picture, 10s are well within the 4.43-4.51 range that dominated last week. War headline sensitivity continues accounting for 90% of forward-looking volatility risk while econ data rounds out the rest. 

Econ Data / Events

ADP jobs (May)

122K vs 117K f’cast, 109K prev

ISM N-Mfg PMI (May)

54.5 vs 53.8 f’cast, 53.6 prev

ISM Services Employment (May)

47.9 vs — f’cast, 48.0 prev

ISM Services New Orders (May)

57.3 vs — f’cast, 53.5 prev

ISM Services Prices (May)

71.3 vs — f’cast, 70.7 prev

Market Movement Recap

08:17 AM Moderately weaker overnight on renewed Iran war hostilities.  Not much reaction to ADP data. 10yr up 3.7bps at 4.49 and MBS down a quarter point

10:17 AM modest improvement after ISM data, but only in Treasuries. 10yr up 2.3bps at 4.476 and MBS still down a quarter point

11:45 AM weakest levels with MBS down 10 ticks (.31) and 10yr up 4.5bps at 4.498

02:37 PM Sideways at weaker levels. MBS down 9 ticks (.28) and 10yr up 3.6bps at 4.489