US: POLITICAL RISK - Republican Hopes Of Retaining House In 2026 Dealt A Blow
Dec-12 13:06
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Executive summary:
- In a rebuke to President Trump on 11 December, Republican state senators in Indiana voted in enough numbers to defeat a proposal to redraw the state’s congressional boundaries. The outcome of the Indiana vote could have nationwide ramifications, given the Democrats need only win four House seats to wrest control from the Republicans (potentially even fewer come November 2026, depending on special elections).
- Treasury Secretary Bessent outlines changes to the Financial Stability Oversight Council (FSOC) in an effort to spur growth via deregulation. Critics warn "the Council is actively sabotaging its own authorities.”
- Following the seizure of an oil tanker by US special forces earlier in the week, six more tankers have been placed on the Treasury Department’s Office of Foreign Assets Control sanctions list. President Trump warns, after military action in the Caribbean, "It's going to be starting on land pretty soon."
- Poll of the Day: Polling from Navigator Research shows respondents feeling more pessimistic about the economy overall than they were pre-government shutdown in September, with a majority remaining uneasy in their personal finances.
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US DATA: Mortgage Rates Steady As Swap Spread Narrows Further
Nov-12 12:28
Mortgage applications were essentially unchanged last week even if it masked a strong uptick in new purchase applications. Mortgage rates have been steady in recent weeks, benefiting from a sizeable tightening in spreads to swap rates.
- MBA composite mortgage applications inched 0.6% higher last week (sa) after -1.9% and 7.1% in the previous two weeks.
- The details were a little more interesting than that suggests though, with new purchase applications increasing 5.8% (largest since early Sept and before that early June) compared to refi applications slipping -3.4%.
- Levels relative to 2019 average for context: composite 71%, new purchases 67%, refis 72%.
- The flatlining in overall activity came as the 30Y conforming rate ticked up 3bps to 6.34% after the 6.30% two weeks prior had been the lowest since Sep 2024.
- The relative stability in mortgages rates in the latest few weeks has come with a further tightening in spreads to swap rates.
- The 30Y mortgage rate to the average 10Y swap rate through the week fell further to 267bps, a fresh low since Apr 2022, compared to an average 285bp in Q1 and a rough range of 300 +/-5bp for some months after reciprocal tariff announcements in April prompted some additional caution in lending standards.
- This narrowing in spreads will be well received by the Trump administration.
OUTLOOK: Price Signal Summary - Bear Cycle In Bunds Remains Intact
Nov-12 12:21
- In the FI space, Bund futures are trading above their recent lows. A short-term bear cycle remains intact and Monday’s fresh cycle low reinforces the bear theme. The contract has cleared a number of important support points; the 50-day EMA, at 129.14, and 128.92, the 61.8% retracement of the Sep 25 - Oct 17 bull leg. Scope is seen for an extension towards 128.52, the 76.4% retracement. Resistance is at 129.31, the 20-day EMA.
- The trend theme in Gilt futures remains bullish and this week’s strong bounce - so far - reinforces a bull theme. Note that moving average studies are in a bull-mode position, highlighting a dominant uptrend. Sights are on the bull trigger at 93.98, the Nov 4 high. A clear break of this hurdle would confirm a resumption of the uptrend and open 94.24, a 1.618 projection of the Sep 3 - 11 - 26 price swing. Support to watch lies at 93.09, the 20-day EMA.
MNI EXCLUSIVE: Belgian Debt Agency's Director of Treasury Speaks To MNI
Nov-12 12:14
Maric Post, the Belgian Debt Agency's Director of Treasury and Capital Markets, speaks to MNI.- On MNI Policy MainWire now, for more details please contact sales@marketnews.com
