MBS Weekly Market Commentary Week Ending 5/7/2021

Long-term 30-year yields have fallen to 2.29%, the 10-year is currently yielding 1.593%, and the Fannie Mae 30-year current-coupon spread to the 5/10-year blend widened to +63.
 

 

According to data published by Freddie Mac, U.S. 30-year home mortgage rates fell to 2.96% from 2.98%. The average 15-year rate decreased to 2.30%, down from 2.31% a week earlier. The mortgage applications index fell 0.9% in the week ending April 30th, after falling 2.5% in the prior week. Refinance applications increased 0.1% for the week and purchases are down 2.5% after falling 4.8% in the prior week, according to MBA weekly survey data.
 
Lower coupon MBS continue their hot-streak and outperformed Treasury hedges particularly in lower coupons. The Fed is expected to purchase $3.4 billion UMBS 30-year 2.0% and 2.5%, and $1.3 billion UMBS 15-year 1.5% and 2.0% today. Economic Calendar:

  • Tuesday: Class A Notification, JOLTS Job Openings
  • Wednesday: CPI
  • Thursday: Jobless Claims, Existing Home Sales
  • Friday: Class B Notification, Industrial and Manufacturing Production