This was reflective of a day of quiet trading in the broader markets, with little in the way of news to move markets significantly.
The bond market opened with losses in the overnight session, but quickly recovered as traders returned to their desks. The 10-year Treasury yield opened at 0.856%, increasing to 0.862% by midmorning. MBS prices rose slightly on the day, closing up 0.06% from the previous day’s close.
The refinance index decreased slightly on Tuesday, down by 1.7% from the prior week. On an annual basis, however, the refinance index still remains at an elevated level of 28.8% higher than last year.
At the same time, mortgage applications declined for the fourth consecutive week, falling 4.9% from last week’s figures. On an annual basis, applications are still up a modest 2.3% compared to this time last year.
Looking ahead to Wednesday’s session, traders will likely be watching for updates on the progress of the Covid-19 vaccine distribution and any further developments on the fiscal stimulus front. The Treasury is also scheduled to auction $20 billion of 10-year notes.
Overall, trading was quiet in the morning session on Tuesday, with little movement in MBS prices. Refinance applications were slightly lower week-over-week, but remain higher than a year ago. Mortgage applications continued their four week decline, though they are somewhat higher year-over-year. Looking ahead, the market will be watching for updates on the progress of the Covid-19 vaccine distribution and other developments in the U.S. economy.
On Tuesday, November 30th, 2020, the bond market saw little change in morning trading. Mortgage-backed securities (MBS) were relatively unchanged with prices rising slightly by 0.06%. The 10-year Treasury yield opened at 0.856%, increasing to 0.862% by midmorning.
The refinance index decreased slightly on Tuesday, down by 1.7% from the prior week. On an annual basis, the refinance index is still at an elevated level of 28.8% higher than last year. Mortgage applications declined for the fourth consecutive week, falling 4.9% from last week’s figures. Despite this, applications are still up 2.3% compared to this time last year.
These figures suggest that while refinancing activity may be slowing down, mortgages are still being taken out at a steady pace. This could be largely due to continued low interest rates, which remain near historic lows despite rising slightly over the past week. This has led to a strong demand for mortgages, prompting lenders to offer attractive rates to customers.
Looking ahead to Wednesday, traders will be focused on the progress of the Covid-19 vaccine distribution and other developments in the US economy. They will also be awaiting the results of a $20 billion 10-year Treasury note auction.
Overall, the market saw little volatility in the morning session on Tuesday. Low interest rates continue to incentivize mortgage applications, though refinancing activity appears to be slowing. While the exact impact of upcoming events remains to be seen, traders will be watching closely to see how markets react throughout the week.
This article was contributed on Dec 01, 2023
