Broker/Owner
Collaborative Capital
License:
NMLS# 278724
NMLS# 2385760

Are Bonds High on Crack (Spreads)?

Are Bonds High on Crack (Spreads)?

The term "crack spread" is quickly becoming mainstream--especially over the past few weeks. It's more of a concept than a specific metric, but it most frequently refers to the margin between input and output costs for fuel (gas, diesel, etc). Petro-nerds seem to like the 3-2-1 crack spread, which covers both gas and diesel (3 barrels of oil margin vs 2 barrels of gas and 1 barrel of diesel). While it's true that we could simply look at RBOB or ULSD futures to gauge price changes at the pump, crack spreads speak to the current state of supply/demand imbalance. They suggest conditions remain tight for fuel prices. A widening crack spread suggests the move in gas prices is being reinforced by refined-product fundamentals rather than merely reflecting a change in crude oil. Notably, crack spreads have correlated with bonds better than individual fuel metrics when we examine large, long-term shifts in fuel prices. But in the medium term, fuel futures (like gas/diesel... not crude oil) are still probably even more relevant. Either way, looming fuel cost implications are weighing on bonds.

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Wednesday's Gains Had More Staying Power

MBS & Treasury Markets
UMBS 5.5
99.84
-0.14 
10YR TREASURY
4.579
+0.028 
7/16/2026 12:40PM EST
The term "crack spread" is quickly becoming mainstream--especially over the past few weeks. It's more of a concept than a specific metric, but it most frequently refers to the margin between input and output costs for fuel (gas, diesel, etc). Petro-nerds seem to like the 3-2-1 crack spread, which covers both gas and diesel (3 barrels of oil margin vs 2 barrels of gas and 1 barrel of diesel). While it's true that we could simply look at RBOB or ULSD futures to gauge price chan...   READ MORE
Today's Mortgage Rates
30YR Fixed
6.68%
+0.04% 
15YR Fixed
6.19%
+0.01% 
7/16/2026
Mortgage rates moved lower again today following another lower-than-expected reading on an inflation report. Yesterday's Consumer Price Index (CPI) had a bigger impact on the underlying bond market, but today's Producer Price Index (PPI) wasn't far behind. Additionally, bonds did a better job of holding onto the improvement into the afternoon hours. This allowed mortgage lenders to drop rates even more than they did yesterday (0.06% today versus 0.05% yesterday). This take...   READ MORE
Economic Calendar
Time Event Period Actual Forecast Prior
Thursday, Jul 16
8:30AM Jul/11 Jobless Claims (k) Jul/11 208K 217K 215K
8:30AM Jul/04 Continued Claims (k) Jul/04 1805K 1820K 1814K
8:30AM Jul Philly Fed Prices Paid Jul 53.90 53.20
8:30AM Jul Philly Fed Business Index Jul 41.4 13 10.3
8:30AM Jun Retail Sales (%) Jun 0.2% 0.2% 0.9%
8:30AM Jun Retail Sales Control Group MoM Jun 0.5% 0.5% 0.7%
10:00AM Jul NAHB housing market indx Jul 34 35 35
10:00AM May Business Inventories (% ) May 0.3% 0.3% 0.5%
10:00AM Jun Pending Home Sales (%) Jun -5.4% -0.5% 3.8%
12:30PM Fed Logan Speech
7:00PM Fed Jefferson Speech
Friday, Jul 17
12:00AM Roll Date - Ginnie Mae 30YR
8:30AM Jun Housing starts number mm (ml) Jun 1.31M 1.177M
8:30AM Jun Import prices mm (%) Jun -0.7% 1.9%
8:30AM Jun Building Permits (ml) Jun 1.40M 1.41M
9:15AM Jun Industrial Production (%) Jun 0.2% 0.1%
10:00AM Jul Sentiment: 1y Inflation (%) Jul 4.6%
10:00AM Jul Sentiment: 5y Inflation (%) Jul 3.3%
10:00AM Jul Consumer Sentiment (ip) Jul 51 49.5
10:00AM Jul U Mich conditions Jul 48.7 47.7
Broker/Owner
Collaborative Capital
License:
NMLS# 278724
NMLS# 2385760