November 1, 2023 – Rate Commentary

• November 1, 2023
• realestatelife
• Business & Markets, Fed, Interest Rates, Politics & Economy, Product News, Rates, Real Estate, Recession, World News, Your Real Estate Life

Rate sheets will start the day slightly better than yesterday, but be ready for the fireworks. Reprice risk is high today, with lots of action that will send bonds all over the place. The fun has already started as I write this, with the Treasury’s refunding announcement and ADP private payroll data already being released (and helping bonds to rally). We will get the JOLTS data at 10am ET, along with ISM manufacturing data. This is all an appetizer, with the main course coming at 2pm ET when the Fed is expected to leave its rate unchanged and at 2:30pm ET when Fed Chair Jerome Powell will have his press conference. Buckle up and hold on tight, and keep your fingers crossed.

We will see lots of movement today, it is a good day to make sure you are signed up for OriginatorSuccess’s rate market text alerts: www.ratetextalerts.com.

All loans should start the day floating, but have a plan heading into this afternoon on what loans will lock at the first sign of trouble. Remember that we often see bonds react one way to the Fed policy statement, and then move the other way during Powell’s press conference. While the last couple of Fed meetings have not been good for rates, this may change today. Although we aren’t going to see rates drop dramatically, if markets react with a bond friendly sentiment we could see rates move over the next few days to the lowest levels we’ve seen in a month.

Technicals:

The UMBS 6.5 coupon is at 99.47, +16bps on the day. Bonds had a positive reaction to the Treasury’s refunding announcement, and no big moves after the ADP number showed less jobs than forecast.

The 10yr Treasury yield at 4.87, holding steady ahead of the Fed.