Perfect Storm Leaves Rate Range Perfectly Intact

Perfect Storm Leaves Rate Range Perfectly Intact

Coming into the week, yields were near the top of a narrow range (3.4-3.56 give or take).  With both ISM reports, the jobs report, and policy announcements from the Fed/ECB/BOE, it was a distinct possibility that we'd see that range broken.  By Thursday morning, that looked like it was a work in progress, but by the end of the day, yields were back to 3.40.  Then in a cruel twist of fate this morning, NFP beat forecasts by the widest margin in a year and half.  90 minutes later, ISM crushed its forecasts as well.  These events combined to push yields right up to the top of the range, leaving us to hurry up and wait for the next set of potential market movers.

Latest Video Analysis

Perfect Storm Leaves The Range Perfectly Intact.mp4

MBS & Treasury Markets
UMBS 5.0 100.22 -0.55 10YR 3.528% +0.126% 2/3/2023 5:00PM EST
MBS are back down 5/8ths on the day in 5.0 coupons and 10yr yields are up 13.4bps at 3.536.  Both of these are fairly close to the weakest levels of the day and a bit of a departure from the "less bad" levels seen around 1pm.  The move isn't significant or important in the bigger picture, but the jumpiest of lenders could technically condone a negative reprice if they'd released rates before 10am ET or if they repriced for the better this afternoon.   READ MORE
Today's Mortgage Rates
30YR Fixed 6.19% +0.20% 15YR Fixed 5.30% +0.13% 2/3/2023
Interest rates take cues from several places. Regularly scheduled economic data is always a consideration because a stronger economy implies more growth and tighter Fed policy, both of which are bad for rates. Certain reports carry significantly more weight than others.  If put to a vote, the perennial top dog would be The Employment Situation (aka "the jobs report").  Over the years it is responsible for more volume and volatility in rates than any other data.&n...   READ MORE
Economic Calendar
Time Event Period Actual Forecast Prior
Friday, Feb 03
8:30AM Jan Manufacturing payrolls (k) Jan 19 6 8
8:30AM Jan Private Payrolls (k) Jan 443 190 220
8:30AM Jan Non-farm payrolls (k) Jan 517 185 223
8:30AM Jan Average workweek hrs (hr) Jan 34.7 34.3 34.3
8:30AM Jan Unemployment rate mm (%) Jan 3.4 3.6 3.5
8:30AM Jan Average earnings mm (%) Jan 0.3 0.3 0.3
10:00AM Jan ISM Biz Activity Jan 60.4 54.5 54.7
10:00AM Jan ISM N-Mfg PMI Jan 55.2 50.4 49.6
Monday, Feb 06
10:00AM Jan Employment Trends Jan 116.31
11:30AM 52-Week Bill Auction (bl) 48
11:30AM 26-Week Bill Auction (bl) 60
Read My Latest Newsletter
Interest rates take cues from several places. Regularly scheduled economic data is always a consideration because a stronger economy implies more growth and tighter Fed policy, both of which are bad for rates. Certain reports carry significantly more weight than others.  If put to a vote, the perennial top dog would be The Employment Situation (aka "the jobs report").  Over the years ... READ MORE