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While there’s been no shortage of political and geopolitical headlines over the past 2 business days, there hasn’t been much by way of inspiration for the bond market. Bonds (and, thus, rates) have moved nonetheless.   Perhaps it was the lower rates achieved last Thursday that prompted a pullback, or perhaps traders are pricing in some caution ahead of this week’s data and Fed announcement. Either way, bonds lost ground on Friday and again today–both times with little by way of overt justification. Fortunately, the losses have been modest.  They leave the average rate very much in the middle of its range over the past 2 months. And it wouldn’t be unfair to say rates have generally been sideways since last November in the bigger picture. Tomorrow’s Retail Sales data is capable of causing volatility in either direction, depending on the outcome.  Then on Wednesday, we’ll hear from the Fed.  While they will not be cutting rates at this meeting, they will be updating their rate outlook–something that frequently gets the market’s attention.

Token Weakness Without a Cause

Sometimes bonds rally or sell-off for no apparent reason, or at least for no reason that can be easily proven.  That’s been the case on each of the past two sessions  with 30yr yields moving almost 10bps higher between the two of them.  Geopolitical motivations have been nonexistent despite some efforts to link oil price concerns to bond weakness (not a solid thesis right now). Fiscal concerns may be having some small effect behind the scenes, but they’re hard to substantiate based on the available headlines. The easiest approach would be to continue to classify the market as rangebound, in which case a pull-back makes sense given the lower yields seen last Thursday–especially with bigger ticket data/events over the next two days.

Econ Data / Events

NY Fed Manufacturing

-16.0 vs -5.5 f’cast, -9.20 prev

Market Movement Recap

09:48 AM Choppy and slightly weaker overnight, but sideways and holding ground since then.   MBS down 2 ticks (.06) and 10yr up 2.4 bps at 4.426

01:47 PM After a decent rally into 10:30am, MBS are down an eighth from highs and 3 ticks (.09) on the day.  10yr up 4.6bps at 4.446

03:50 PM Heading out near weakest levels with MBS down an eighth on the day and 10yr yields up 5.3bps at 4.454

After rallying fairly well last Wednesday and Thursday, bonds pulled back on Friday, but not enough to erase more than half of the week’s gains. The new week is starting out in uneventful fashion with trading levels reasonably close to Friday’s latest levels after a bit of overnight weakness. The day’s only econ data (NY Fed Manufacturing) isn’t a big market mover to begin with and has already passed without a trace. With that, the focus remains square on Wednesday’s Fed dot plot as a key informant for near-term bond market volatility.  Tuesday’s AM data also has some chance to cause a response–largely due to Retail Sales. Geopolitical headlines haven’t been a big issue for better or worse as far as bonds are concerned although that could change depending on the nature of any additional escalation.
The bigger picture trend arguably remains rangebound with Friday’s weakness acting as a rejection of another breakout attempt (of the 4.40% range floor).  But someone more inclined to bullish interpretations could also argue that a general downtrend (green lines in the chart below) is in place with this morning’s friendly bounce adding the latest piece of evidence.

The company also made several new executive appointments in 2025 as it aims to turn itself into a national one-stop shop with end-to-end home buying services.

The average owner experienced a four-figure decline in the first quarter compared to the same period last year even though the negative equity share is low.

The industry’s biggest opportunities involve the evolving cost of capital, which will shift funding sources from the private, local lending markets to institutional sources.

Secondary market interest in home equity contracts is drawing new participants, with 2025 securitization activity ahead of last year, industry leaders said.

The transaction is the first in what is planned to be a continued series of purchases by the new fund as it continues to raise capital from investors.

The top tier 30yr fixed mortgage rate index rose 0.04% on Friday, which would be a medium-sized defeat in and of itself. In the broader context, however, it was an acceptable adjustment on what has otherwise been a solid week.  Specifically, today’s rates are still 0.08% lower than last Friday’s. There were no standout individual sources of inspiration today. Keen observers may note that today’s Consumer Sentiment data seemed to coincide with mid-day upward pressure in rates, but that was a bit deceptive.  The upward pressure began in earnest at 8:20am ET, which is essentially the opening bell for the bond market.  It’s true that the weakness accelerated after the Consumer Sentiment data, but not until 6 minutes afterward, and that’s an uncommon delay when it comes to rates responding to economic data. All that to say: it looks like the rate market was somewhat determined to lose some ground today.  This can happen on weeks like this one where there has been a solid improvement through Thursday and where the following week brings additional sources of potential volatility.