Uncanny Calm Unlikely to Last

Uncanny Calm Unlikely to Last

For the third straight day, the bond market traded in a range that was significantly more narrow than almost any other day in more than a month.  By the time we consider the overall range of the past 3 days, there aren't many comparable examples.  The closest candidates tend to fall at the end of the month and to be followed by a quick return to prevailing patterns of volume and volatility.

Market Movement Recap
08:59 AM

Flat start despite some back and forth overnight.  Slightly weaker after data, but not necessarily because of it.  10y up 2.3bps at 3.589.  MBS down an eighth.

01:32 PM

Sideways to slightly stronger.  10yr down 1.5bps at 3.551.  MBS up 1 tick (0.03).

03:27 PM

modest additional gains in Treasuries heading into the afternoon.  10yr down 2bps at 3.547.  MBS still flat at same levels as the last update.

Latest Video Analysis

Uncanny Calm Unlikely to Last.mp4

MBS & Treasury Markets
UMBS 5.0 99.38 -0.03 10YR 3.553% -0.013% 3/30/2023 5:00PM EST
Volume and volatility have rapidly died down over the past 3 days as the market settles into a waiting game.  What are we waiting for?  Successive days without bank drama, bigger ticket econ data, and any new evidence that helps confirm a Fed pivot. It's worth noting that these instances of incredibly narrow, sideways trading ranges tend to be fleeting. We don't have any perfectly correlated examples, but if we cherry pick the last 3 best candidates (3 trading da...   READ MORE
Today's Mortgage Rates
30YR Fixed 6.59% -0.02% 15YR Fixed 6.00% -0.02% 3/30/2023
This week's theme has undoubtedly been the extreme absence of volatility in the rate market.  Whether we're looking at mortgage rates themselves or a broader rate benchmark such as 10yr Treasury yields, both are right in line with Monday afternoon's latest levels. What's up with that? The bond market (which dictates rates) requires a steady stream of motivation if it's going to inspire noticeable changes in rates.  Sometimes several sources of motivation cance...   READ MORE
Economic Calendar
Time Event Period Actual Forecast Prior
Thursday, Mar 30
8:30AM Q4 GDP Final (%) Q4 2.6 2.7 2.7
8:30AM w/e Jobless Claims (k) w/e 198 196 191
8:30AM w/e Jobless claims 4-wk avg (k) w/e 198.25 196.25
8:30AM w/e Continued Claims (ml) w/e 1.689 1.697 1.694
8:30AM Q1 GDP Prelim (%) Q1 2.9 2.9
10:30AM w/e Nat gas-EIA, change bcf w/e -47 -54 -72
Friday, Mar 31
8:00AM Feb Dallas Fed PCE (%) Feb 6.3
8:30AM Feb Personal Income (%) Feb 0.2 0.6
8:30AM Feb Inflation-Adjusted Spending (Consumption) (%) Feb 1.1
8:30AM Feb PCE price index mm (%) Feb 0.6
8:30AM Feb Outlays (consumer spending) (%) Feb 0.3 1.8
8:30AM Feb PCE (y/y) (%) Feb 5.4
8:30AM Feb Core PCE (m/m) (%) Feb 0.4 0.6
8:30AM Feb Core PCE Inflation (y/y) (%) Feb 4.7 4.7
9:45AM Mar Chicago PMI Mar 43.4 43.6
10:00AM Mar Sentiment: 1y Inflation (%) Mar 3.8
10:00AM Mar Sentiment: 5y Inflation (%) Mar 2.8
10:00AM Mar Consumer Sentiment (ip) Mar 63.2 63.4
Read My Latest Newsletter
While there were no further bank failures this week, there was plenty of concern and speculation about who might be next. Those concerns teamed up with Wednesday's Fed announcement to push interest rates lower (yes, even though the Fed hiked rates). Meanwhile, two separate reports showed a decline in home prices. Bank Failures Driving Markets Since the failure of Silicon Valley Bank earlie... READ MORE