“Apparently you can’t use ‘beef stew’ as a password. It’s not stroganoff.” How’s your privacy? Or another question: Why wouldn’t you tell your recent borrower to freeze their credit after the loan was done? TransUnion has filed data breach disclosures. According to the filings, this data breach, affecting millions of TransUnion customers through SalesForce, occurred on July 28, 2025, and was discovered a couple of days later. Data breaches are always fertile grounds for attorneys, and speaking of legal matters, Federal Reserve Board Governor Lisa Cook “did not ever commit mortgage fraud,” her lawyer Abbe Lowell said in a court filing bolstering arguments why a judge should temporarily block President Donald Trump from firing her. “Any of Cook’s statements that she made on mortgage applications, which Trump has cited as the reason for her termination, do not give the president legal cause to remove her. Lowell said multiple federal government entities received her mortgage details before the Senate first confirmed her nomination to the Fed in May 2022.” Nearly 600 economists signed an open letter warning that her potential firing threatens the Fed’s independence and erodes trust in a key pillar of the U.S. financial system. (Today’s podcast can be found here and this week is sponsored by Gallus Insights. Mortgage KPIs, automated, at your fingertips. Gallus allows you to turn data from your various databases and systems into automated business intelligence and actionable insights. Hear an interview with Porchlight’s David Wells on how the mortgage industry is shifting from a human-driven, siloed process to a fully programmatic, API-powered model that automates repetitive tasks, streamlines capital markets execution, and empowers loan officers to focus on high-value, trust-building relationships.)

The jobs report is the most important scheduled event each month as far as interest rates are concerned. The last installment helped get the average 30yr fixed rate down from 6.75 to 6.50 because it came out much weaker than expected (in addition to revising the previous two months lower as well). The shift in the labor market outlook led the market to firmly price-in a Fed rate cut at the next Fed meeting in 2 weeks. Other economic reports since then have been a bit less dire, but still suggested enough economic uncertainty for rates to stay at recent lows.  Today’s data was the latest example. It wasn’t far from market expectations, but that left the door open for traders to continue hedging against the possibility of more labor market deterioration in tomorrow’s report. Average 30yr fixed rates moved just a bit lower and are now at another new low for 2025 (lowest since October 3rd, 2024). The rate rally could easily accelerate if the jobs report is weaker than expected.  But if the data is surprisingly strong, rates would almost certainly move back up.  The magnitude of either move would depend on the magnitude of the surprise in the data.

Bonds Positioning For Weaker NFP?

One of the best things to understand about the jobs report is that the payroll count can go BIG in either direction, regardless of what the other data or labor market trends have been suggesting. Today’s data suggested a predictable level of labor market weakness. This isn’t something that would guarantee a bond rally, but that’s nonetheless what happened.  Rather than think of this as a “lead-off” or bonds getting in position for a weaker NFP, it’s more accurate to treat such moves as a simple circling of the wagons as traders exit previously held positions to get neutral ahead of a high risk event.  The movement in the yield curve is a solid clue here as it had steepened to what are essentially the highest levels since early 2022 by Wednesday morning and has been correcting ever since (correcting = 10s and 30s doing better than 2s and 3s). All of this is much ado about nothing.  The point is as boring as it is true: bonds can rally or sell on Friday at a pace that’s only really limited by the size of the beat/miss in the data.

Econ Data / Events

ADP Jobs

54k vs 65k f’cast, 104k prev

Jobless Claims

237k vs 230k f’cast, 229k prev

Continued Claims

1940k vs 1960k f’cast, 1944k prev

ISM N-Mfg PMI (Aug)

52.0 vs 51 f’cast, 50.1 prev

ISM N-Mfg PMI (Aug)

52.0 vs 51 f’cast, 50.1 prev

ISM Services Employment (Aug)

46.5 vs — f’cast, 46.4 prev

ISM Services Employment (Aug)

46.5 vs — f’cast, 46.4 prev

ISM Services New Orders (Aug)

56.0 vs — f’cast, 50.3 prev

ISM Services New Orders (Aug)

56.0 vs — f’cast, 50.3 prev

ISM Services Prices (Aug)

69.2 vs — f’cast, 69.9 prev

ISM Services Prices (Aug)

69.2 vs — f’cast, 69.9 prev

Market Movement Recap

08:15 AM Limited reaction to ADP data, but no bad reaction.  MBS up an eighth and 10yr down 3.6bps at 4.183

10:02 AM Off best levels after ISM data.  MBS up 3 ticks (.09) and 10yr down 2.4bps at 4.193

11:50 AM Sideways drift continues.  MBS up an eighth and 10yr down 2.8bps at 4.19

03:04 PM Best levels of the day with MBS up 6 ticks (.19) and 10yr down 4.6bps at 4.171

Thursday morning’s slate of econ data was the most active of the week with claims, layoffs, ADP, and ISM Services (also the Trade Gap and Labor Costs, but those aren’t really in the “market mover” category). Ironically, almost all of today’s movement happened in the overnight session whereas the mixed data has seen a broadly sideways reaction. ADP was slightly weaker than expected, but it wasn’t enough for bond buyers (there was modest selling after ADP). ISM was a bit stronger at the headline level, but the bond-bearish message was tempered by weak employment and a modest downtick in prices. Bottom line: this data isn’t weak enough to prompt a friendly lead-off ahead of Friday’s jobs report, but not strong enough to derail the overnight gains.

As Washington weighs a national housing emergency, U.S. homeownership has slipped year-over-year, according to Redfin.

A Tuesday night deadline has passed and some investors in certain senior notes now have a new expiration date for the closing of the tender offer and exchange.

Federal Reserve Bank of St. Louis President Alberto G. Musalem said central bank autonomy leads to lower inflation and stable employment numbers. His comments come amid the Trump administration’s attempt to remove a Fed board member for cause.

A pickup in refinances was offset by the first pullback in purchases in four weeks in the run-up to Labor Day, according to the Mortgage Bankers Association.

The US 30-year yield climbed as much as four basis points to 4.999% on Wednesday before stabilizing.

Straightforward Data-Driven Rally

It proved to be an incredibly straightforward day for the bond market.  Trading levels were roughly unchanged in early trading. Friendly Fed comments provided a modest boost, but it was the JOLTS data that clearly set the tone. With job openings hitting the lowest levels since late 2020, traders were quick to hit the buy button. Keep in mind, this is July data whereas Friday’s jobs report will be August data. Nonetheless, it was an extra measure of labor market weakness that helped confirm last month’s lackluster jobs report. If Thursday’s data is similarly downbeat, we could see more of a pre-NFP lead-off with yields challenging the recent range floor.

Econ Data / Events

Job Openings

7.181m vs 7.400m f’cast, 7.357m prev

Job Quits

3.208m vs 3.142m prev

Market Movement Recap

10:01 AM Rallying after JOLTS data.  10yr down 2.8bps at 4.231.  MBS up 2 ticks (.06).

11:39 AM Holding post-JOLTS gains.  MBS up 6 ticks (.19) and 10yr down 4.3bps at 4.216

04:13 PM Heading out just off the strongest levels with MBS up an eighth and 10yr yields down 4bps at 4.22