UK FISCAL: Reeves to receive first round of OBR's forecast today

• MBA composite mortgage applications dipped -1.2% (sa) last week, a third consecutive small weekly decline after a refi-driven 11% increase earlier in August.  
• New purchase applications -3.1% after 2.2%, refi applications 0.9% after -3.5%.
• Levels relative to 2019 averages: composite 58%, new purchases 61% and refis 52%.
• There wasn’t much sign of a boost from the 5bp decline in the 30Y conforming mortgage rate to 6.64% for a new low since early April’s 6.61% ytd low.
• The spread to average 10Y swap rates over the week meanwhile held at its slightly lower recent levels, between 291-293bp for three weeks now vs the range of 300bp +/-5bp seen mostly since reciprocal tariff announcements in April vs 285bps averaged in Q1. It’s a mild relative easing in lending standards recently.
• US Tsy Sec Bessent has in recent weeks talked on wanting to keep the spread between mortgage rates and treasuries flat or even bring it down. To this end, spreads to 10Y Tsy yields (the usual point of focus) have averaged 240bp over the past month, pretty stable considering they’ve averaged 245bp all year, although that’s down significantly from the closer to 300bp in 2023. 

Large Buxl Calendar spread goes through in the past 10 minutes or so.

• UBU5/Z5 trades in 37.9k.

• Date $MM Issuer (Priced *, Launch #)
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• 09/03 $Benchmark OKB 5Y SOFR+43
• 09/03 $Benchmark Nordea Bank Perp Nov'33 7.25%a
• 09/03 $Benchmark The Commercial Bank (PSQC) 5Y +125a
• 09/03 $Benchmark Turkie Wealth Fund +5Y 7.625%a, 10Y 8.735%a