US DATA: Mortgage to Swap Rate Spreads Holding Near Post-Tariff Lows
Aug-27 12:09
- MBA composite mortgage applications dipped -0.5% (sa) last week after -1.4% the week prior as they still holds onto most of its refi-driven 11% increase before that.
- New purchase applications increased 2.2%, their largest increase in a month, whilst refi applications fell another -3.5% after -3.1% following the 23% jump before that.
- Levels relative to 2019 averages: composite 58%, new purchases 63% and refis 51%.
- The 30Y conforming rate inched up another 1bp to 6.69% after the 6.67% two weeks prior was the lowest since early April.
- The spread to 10Y swap rates of 291bp saw a second week below the range of 300bp +/-5bp seen mostly since reciprocal tariff announcements in April vs 285bps averaged in Q1.
- Tsy Sec Bessent on Fox Business today said he doesn’t want a wider spread on mortgages vs Treasuries as part of discussions around Fannie Mae and Freddie Mac sales. He’s not sure on the timing of sales, with potential deal news sometime in September or early October.
- That’s similar rhetoric from a couple weeks ago when he said the White House wants to maximize value for the taxpayer and also keep the spread between mortgage rates and treasuries flat or even bring it down.
- To his point, spreads to 10Y Tsy yields (the usual point of focus) have been fairly stable around the 250bp level so far this year (latest 244bp) vs closer to 300bp in 2023. Alternatively, spreads to 30Y Tsy yields have fallen to 181bps most recently having started the year nearer 220bps amidst 30Y yields holding at elevated levels due to Fed independence concerns.
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US-RUSSIA: Trump Says Will Reduce 50-Day Deadline for Russia-Ukraine Ceasefire
Jul-28 11:58
- "*TRUMP SAYS HE WILL REDUCE 50 DAY DEADLINE HE HAD FOR PUTIN" - bbg
- The 50-day deadline referenced here is September 2nd, at which Trump has demanded Russia-Ukraine fighting to stop, and if breached - Trump has threatened secondary sanctions on Russia's trade partners (with the aim of starving Moscow further of FX income).
USDJPY TECHS: Support At The 50-Day EMA Holds
Jul-28 11:32
- RES 4: 151.21 High Mar 28
- RES 3: 150.49 High Apr 2
- RES 2: 149.38 50.0% retracement of the Jan 10 - Apr 22 bear leg
- RES 1: 148.66/149.18 High Jul 21 / High Jul 16 and the bull trigger
- PRICE: 148.40 @ 12:31 BST Jul 28
- SUP 1: 146.76 20-day EMA
- SUP 2: 146.01/145.86 50-day EMA / Low Jul 24
- SUP 3: 145.16 61.8% retracement of the Jul 1 - 16 bull cycle
- SUP 4: 144.21 76.4% retracement of the Jul 1 - 16 bull cycle
A bull cycle in USDJPY remains in place. Today’s strong start to the week signals the end of the corrective pullback between Jul 16 - 24. Attention is on key resistance and the bull trigger at 149.18, the Jul 16 high. A break of this hurdle would confirm a resumption of the uptrend. Pivot support to monitor is 146.01, the 50-day EMA. A clear breach of it would instead signal scope for stronger reversal. First support is at 146.76, the 20-day EMA.
GLOBAL: Greer Doesn't Expect Big Breakthrough on China Trade Today
Jul-28 11:31
USTR Greer speaking on CNBC:
- "ON EU TRADE: WANT TO KEEP WORKING ON STEEL, DIGITAL SERVICES TAXES ALSO AREA TO KEEP WORKING ON
- ON CHINA TRADE: WANT TO MOVE FORWARD IN A POSITIVE WAY, DON'T EXPECT BIG BREAKTHROUGH TODAY" - Reuters
