EMISSIONS: EU Mid-Day Carbon Summary: Carbon Track Weekly Gain On Equities Gain

MBA composite mortgage applications were little changed last week when accounting for usual volatility, although extended a recent patch of weakness for new purchases relative to refinancing activity.  

• Mortgage applications increased 1.1% (sa) last week after -2.6% and 12.5%.
• Unusually, new purchase applications underperformed refis for a fourth straight week, dipping -0.4% (after -3.0% and 10.3%) vs a 3.0% increase for refis (after -2.1% and 15.6%).
• That said, new purchases are still at 64% of 2019 averages vs refis at 41% for broader context.
• The 30Y conforming rate increased 4bp after a 9bp decline, with mixed implications for spreads considering average 10Y swap rates dipped 4bps last week vs no change the week prior.
• It left a 30Y mortgage rate to 10Y spread of 302bp, close to its recent average having eased after widening to 315bps in late April following tariff-driven uncertainty.
• That’s still wider than the 285bp averaged in Q1 in a net tightening in conditions, which could be reflecting some more pessimistic looking housing data more broadly. 

• Treasury futures bounce off recent lows - apparently following German Bund lead higher in the last few minutes, no obvious headline driver - flow driven on moderate volumes ahead the NY open.
• Still inside a narrow overnight range, the Tsy Sep'25 10Y contract trades steady at 111-21 (111-17.5L / 111-24H), volume just over 313k. 10Y yield -.0039 at 4.2906%.
• Initial technical support below at 110-23 (50-day EMA).
• Cross asset: stocks flat (SPX eminis +.5 at 6146.75), crude firmer after two day rout (WTI +.58 at 64.95), Gold firmer (+5.00 at 3328.67).

Speaking in the House of Commons, Deputy Prime Minister Angela Rayner says to MPs that the vote on proposed welfare reforms, which has sparked a major rebellion among MPs from the governing centre-left Labour party, will go ahead on Tuesday, 1 July. There has been speculation that the gov't could pull the legislation in order to avoid an embarrassing defeat on an amendment that could kill the bill for this parliamentary session (see 'UK: i Paper-Gov't Considers Pulling Welfare Reform Bill Amid Growing Rebellion' 11:56BST). 

• Pippa Crerar at The Guardian posted on X a short time ago: "...[gov't] argues moral case for reforming disability benefits system & warns of £5bn budget hole without cuts. Lots of finger-pointing at political [operation] over risk to PM's authority & potentially serious market consequences. Rebellion has grown. Question is: how many of 123 Labour signatories will, when push comes to shove, vote against? They say they want to pause bill, not kill it, and don't want to damage Starmer's government. But numbers don't look good. With working majority of 165, just 83 rebels could inflict defeat. No plan yet to delay bill or make concessions, but unless numbers shift, surely only a matter of time."
• HuffPo reports that according to a senior gov't source "There are two options – pull the vote or make major changes to the bill. Both will leave major questions about [PM Sir Keir Starmer's] authority."