Markets Hit by Glut of Escalation Headlines
Monday's trading session ended up being as simple as it was unpleasant. Bonds lost ground somewhat sharply as war-related headlines kept adding up to additional escalation. Highlights include overnight reports of Iran hitting a U.S. warship with missiles, multiple reports of UAE air defenses being activated, and damage/fire at a UAE oil export terminal. While bonds had a few moments of independence, they were broadly driven by rising oil prices associated with the aforementioned headlines.
Econ Data / Events
ISM Manufacturing Employment (Apr)
46.4 vs 49 f'cast, 48.7 prev
ISM Manufacturing PMI (Apr)
52.7 vs 53 f'cast, 52.7 prev
ISM Mfg Prices Paid (Apr)
84.6 vs 80 f'cast, 78.3 prev
Market Movement Recap
09:20 AM moderately weaker overnight. 10yr up 3.5bps at 4.41 and MBS down 7 ticks (.22).
11:31 AM Weakest levels after headlines regarding Iran attacking UAE. MBS down 3/8ths and 10yr up 6bps at 4.435
02:23 PM sideways just off weakest levels. MBS down half a point and 10yr up 7.1bps at 4.447
Highest Rates in More Than a Month
Top-tier 30-year fixed rates are back above 6.5% today for the first time in more than a month for the average lender. Many lenders raised rates during the course of the day as well. Those who didn’t will likely have to raise rates tomorrow unles…