August 8, 2023 – Rate Commentary

• August 8, 2023
• realestatelife
• Business & Markets, Fed, Interest Rates, Politics & Economy, Rates, Real Estate, Real Estate Finance, Recession, World News, Your Real Estate Life

WRAP UP
UMBS 5.5: 98.73 (-16bps)
10yr yield: 4.03

Mtg bonds bouncing around through the day, but not enough to see lenders reprice worse. Not a lot of risk floating into tomorrow.

Rates sheets this morning will improve, and reprice risk on the day is low. Bonds here and abroad got a big boost overnight from soft economic data in China combined with concerns about a big new tax on banks in Italy and a downgrade of credit rating to banks here at home. The only thing we have to look out for later today is the 1pm ET 3yr Treasury auction, which shouldn’t cause big waves, but could cause some ripples. The outlook remains good heading into the inflation data at the end of the week.

For all loans, cautiously float.  Rates aren’t likely to go down much from here unless we get some help from Thursday’s CPI inflation data, and we’ll want to try and float into it unless the outlook changes. 

Technicals:

The UMBS 5.5 coupon (MBS or mortgage backed securities) at 99.11, +20bps on the day, helping recover the losses from yesterday and touch back on Friday’s best levels.

The 10yr Treasury yield at 4.00, dropping significantly from the 4.10 that it ended the day with yesterday.