PORTUGAL AUCTION PREVIEW: On offer next week

MBA composite mortgage applications unsurprisingly received a boost from lower rates this week although there was limited passthrough to mortgage rates in a further tightening of lending standards. 

• Composite applications increased 11% last week (sa), leaving them back close to where they were in late March having jumped 20% in the first week of April as rates tumbled following Apr 2 tariff announcements before subsequently declining 23% over the next three weeks.
• The breakdown by new purchases and refis follows a similar pattern, just with refis mostly more volatile.
• A reminder of relative levels: composite applications at 53% of 2019 levels, new purchases at 63% and refis at 42%.
• The 30Y conforming rate fell 5bp last week to 6.84% (lowest since week of Apr 11) vs a 13bp decline in the average 10Y swap rate through the week (although the average of 3.69% came with a wide range of 3.59-3.79%).
• The 30Y conforming to 10Y swap spread of 315bp is up from sub-280bps in late February for its highest since Feb 2024. 

• GBP1125.0mln have been available.
• This leaves GBP24.199bln of the gilt in issue.

• Secured Overnight Financing Rate (SOFR): 4.32% (-0.01), volume: $2.620T
• Broad General Collateral Rate (BGCR): 4.31% (+0.00), volume: $1.075T
• Tri-Party General Collateral Rate (TCR): 4.31% (+0.00), volume: $1.035T
• (rate, volume levels reflect prior session)