US DATA: Higher Rates Further Crimp Mortgage Applications
Apr-23 11:16
MBA mortgage applications saw a second week of declines to unwind a pop higher early in April as rates rebounded. Current swap rates suggest the climb in mortgage rates is likely to slow ahead but also won’t offer much of a tailwind for mortgage activity.
- MBA composite mortgage applications fell -12.7% (sa) last week to build on the -8.5% previously to have now fully reversed the 20% increase two weeks ago.
- Refis -20% after -12.4% and 35%, new purchases -6.6% after -4.9% and 9.2%.
- It came from another step higher in the 30Y conforming rate, up 9bps to 6.90% after a 20bp increase the week prior, to leave rates at their highest since mid-Feb.
- There should be some respite in the short-term ahead, with 10Y swap rates currently 6-7bp lower than last week’s average.
- For now though, it’s helped new purchases full back further from what had been their highest since Jan 2024 (most recently at 59% of 2019 levels) whilst refis are 39% of 2019 levels.
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BUNDS: J.P.Morgan Recommend Belly Longs On 5-/10-/30-Year Fly
Mar-24 11:09
Late on Friday J.P.Morgan recommended belly longs on the 5-/10-/30-Year German fly.
- They expect “the 2s/10s curve to continue gradually flattening on pricing out of a large part of the term premia currently in intermediate yields”.
- Further out, they “still find the 10s/30s curve around 5bp too steep after adjusting for monetary policy expectations and the ECB balance sheet composition”.
OUTLOOK: Price Signal Summary - Corrective Cycle In S&P E-Minis Still In Play
Mar-24 11:05
- In the equity space, the trend condition in S&P E-Minis is bearish and the latest recovery appears corrective. Moving average studies are unchanged -they remain in a bear-mode set-up, highlighting a dominant downtrend. A resumption of weakness would open 5483.50, a 2.00 projection of the Dec 6 ‘24 - Jan 13 - Feb 19 swing. Note that the short-term trend condition is oversold. Recent gains are allowing this set-up to unwind. Initial firm resistance to watch is 5801.77, the 20-day EMA. The bear trigger is 5559.75, Mar 13 low.
- EUROSTOXX 50 futures continue to trade above their recent lows. The medium-term trend direction is up and the recent pullback is considered corrective. Support to watch is the 50-day EMA, at 5285.44. It has recently been pierced. A clear break of it would highlight a stronger short-term bear threat and suggest scope for a retracement towards 5160.00, the Feb 4 low. The bull trigger is 5516.00, the Mar 3 high.
PIPELINE: Corporate Bond Roundup: MuniFin, SMBC Aviation on Tap
Mar-24 11:02
- Date $MM Issuer (Priced *, Launch #)
- 03/24 $1b MuniFin WNG 5Y SOFR+49a
- 03/24 $500M SMBC Aviation Cap 5Y +130a
- 03/24 $Benchmark Swiss Re 21NC20 +175a
- 03/24 $Benchmark KNOC 3Y +95a, 3Y SOFR, 5Y +100a
- 03/24 $Benchmark Korea National Oil 3Y +65a, 3Y SOFR+77a, 5Y +70a
- 03/24 $Benchmark Petronas +5Y, 10Y, 30Y investor calls
- 03/24 $Benchmark NDB 3Y investor calls
- 03/24 $Benchmark IBD 5Y investor calls
- Expected Tuesday:
- 03/25 $Benchmark JFM 5Y SOFR+68
