On a flight yesterday I had a choice of movies and, knowing nothing about it, chose “The Beekeeper,” filled with severed fingers and broken glass being shoved into jugular veins. Fortunately, I followed it with “Boys in the Boat” (predictable but well done), otherwise I was going to spend my weekend watching “Notting Hill” and “Pride & Prejudice” dozens of times to cancel out “The Beekeeper” gore. Plenty of capital markets folks and vendors will be watching movies on flights next weekend as they head to the MBA’s Secondary in The Big Apple. (The Origin of “The Big Apple”: a jazz age term for a sure bet on horse racing.) I have a travel tip for you. Did you know you can text your flight number to yourself and preview the flight info without going into the App? For example, text AA0672 to yourself on your cell. Then double click on the flight number and select “preview flight.” Voila! (Found here, this week’s podcasts are sponsored by Matic, the digital insurance marketplace built for the mortgage industry. Matic integrates home insurance shopping into the lending and servicing experience, allowing customers to shop carriers and find a policy in minutes. Create a new revenue stream that boosts customer happiness today! Hear an excerpt of an interview with Brian Vieaux and Kyle Draper on how to be a next generation loan officer and build your book of business.) Lender and Broker Software, Products, and Services A brief meeting with Secure Insight’s CEO Andrew Liput and Client Development Manager Amanda Padd at the NS3 Settlement Services Conference in Naples Florida May 21-23 will introduce you to TruePay. If you are a title company or law firm looking for an easy to use, no contract, low fee disbursement fraud prevention tool, Andrew and Amanda will show you how easy it is to prevent wire fraud and mortgage payoff fraud. Book a time while there are still slots available by emailing Amanda, or stop by their booth and table in the vendor area. Amanda will also be conducting a 15-minute demo during the vendor demo session on May 21st at 2:30pm in the Orchid Ballroom.

Bonds Boosted by Data and Well-Received Auction

Jobless Claims data doesn’t normally move the market, but it did this morning, even if only by a bit.  It was enough to turn modest losses into modest gains ahead of the afternoon’s 30yr bond auction.  Here too, hopes were not high for a big reaction.  After all, there was no real reaction to yesterday’s 10yr auction.  But things were different this time as traders bid more aggressively for the longer duration.  With that, we had two modest-but-noticeable rallies that left trading levels right in line with this week’s range after starting out at the highest yields of the week.

Econ Data / Events

Jobless Claims

231k vs 210k f’cast, 209k prev

Market Movement Recap

08:31 AM Modestly weaker overnight, but back into the green after claims data.  MBS unchanged.  10yr down 1bp at 4.487

12:17 PM Steady near stronger levels.  MBS up 3 ticks (.09) and 10yr down 1.2bps at 4.486

01:04 PM Best levels of the day after 30yr bond auction.  10yr down 2.4bps at 4.472.  MBS up an eighth.

04:32 PM Sideways and strong into the close.  MBS up just over an eighth and 10yd down 3.9bps at 4.458.

The most prevalently quoted conventional 30yr fixed rates are at the lowest levels in a month as of today, but there are a few “yeah buts” that make that achievement look a bit less lofty.  The first is that the rates seen on any day this week would have qualified for the same distinction if they’d remained intact today.  Reason being: there was a big rate spike last month on April 10.  On a related note, today’s rates weren’t appreciably lower than those seen on Tuesday. Still… lower is lower and we’ll take it! Today’s improvement wasn’t guaranteed.  It required some sacrifices in the economic data with Jobless Claims coming in higher than expected.  Then in the afternoon, the scheduled auction of 30yr US Treasury Bonds was met with solid demand.  Both events helped put downward pressure on rates with many lenders ultimately issuing mid day reprices with better terms. All of the above has played out in a very narrow range in the bigger picture.  The big spike on April 10th was in a completely different league and it was exclusively a response to the Consumer Price Index (CPI).  With that in mind, the next CPI will be released next Wednesday.  It has just as much power to cause just as big of a move as it did last time, for better or worse. 

It is a starkly data-free week for all intents and purposes, but some economic reports are with us as always on a weekly basis.  Thursday’s initial jobless claims data is the most notable weekly report even though it rarely causes a reaction in the bond market.  Today is a clear exception owing to the much larger than normal deviation from the forecast consensus (231k vs 210k prev). 

Even though several analysts and trade desks have attempted to explain away the increase, bonds are unfazed.  After starting the day slightly weaker, we’re now slightly stronger (no impact on the bigger picture and nothing significant… just a nicer start).

The chart above may make today look like a bigger deal, so let’s take a moment to zoom out and include the past month of market movement to see how today stacks up:

A group of plaintiffs in another action against the National Association of Realtors and three franchisors claimed harm if the May 9 final settlement hearing took place.

The rates of single parent homeownership by gender differ by 14 percentage points, even though more single women own homes than men.

Out of the 221 metro areas tracked, 205 had existing home price increases and just 15 reported year-over-year declines, the National Association of Realtors said.

McCargo will succeed Teresa Bryce Bazemore at what the former sees as a “transitional, pivotal moment” for the Federal Home Loan bank.

Purchases and refinances both contributed to weekly growth, with notable increases in certain government-lending segments, the Mortgage Bankers Association said.

Yesterday, we took a look at the recent winning streak for mortgage rates.  Specifically, they had moved lower for 5 straight days–a feat only achieved two other times this year.  While there have been streaks more than twice as long, the odds of a pull-back start increasing pretty quickly at the 5 day mark and today provided fresh evidence. Thankfully, the pull-back was very small with the average lender only moving up 0.01%.  That means many borrowers won’t see any difference in today’s rate quotes versus yesterday’s.  There were no major sources of volatility today for the bonds that underlie mortgage rate movement.  That’s a theme for the entire week when it comes to scheduled data.  Unexpected market movers are always a risk, but the biggest risks are tied to a few scheduled economic reports.  Next week’s Consumer Price Index remains the best example.