While FHFA reduced most of the single-family low-income goals, the MBA wants the refinance target for Fannie Mae and Freddie Mac cut as well, its letter said.

The age at which people purchase their first home has climbed rapidly since 2021, when the median was 33, according to a National Association of Realtors survey of transactions from July 2024 through June.

Wednesday More Likely to Take Cues From Econ Data

Bonds benefited from heavy stock selling late in the overnight session. This is not the typical pattern seen these days, but it’s not uncommon to see some positive spillover into bonds when stock losses are sharp enough. In any event, it’s not something to count on when it comes to tomorrow’s motivations. For that, we actually have economic data for a change. In the absence of government agency data, if we had to pick 2 reports to carry the torch, they would be ADP employment and ISM Services PMI. Tomorrow brings us both releases and, thus, a strong chance to see data-driven volatility. 

Market Movement Recap

09:15 AM modestly stronger overnight and holding gains so far.  MBS up 2 ticks (.06) and 10yr down 1.4bps at 4.095

01:39 PM Sideways near best levels. MBS up an eighth and 10yr down 2.6bps at 4.083

04:48 PM Heading out at best levels.  MBS up 5 ticks (.16) and 10yr down 2.5bps at 4.084

The Consumer Financial Protection Bureau has seen a rapid drop in the effectiveness of its cybersecurity program, according to a new report from the Fed’s Office of Inspector General.

The agreement, if approved by a federal judge, would end litigation over two distinct cybersecurity incidents in 2021 which affected over 2 million customers.

The inspector general’s office, responsible for overseeing the regulator, now sits vacant amid Director Bill Pulte’s swift changes and numerous fraud probes.

In her first public appearance since President Trump moved to fire her from the Federal Reserve Board of Governors, Fed Gov. Lisa Cook reiterated her commitment to bringing inflation under 2% and said that the labor market remains “solid.”

Now that quantitative tightening is ending, the debate on who should be the MBS buyer of last resort, Fannie Mae and Freddie Mac, or the Fed, is taking hold

Light Volatility After Initial Losses

The first day of the new month began with some potential excitement, albeit not the good kind. A corporate bond offering from Alphabet pushed yields quickly higher just before 8am. Lackluster results in the ISM Manufacturing data helped push back in the other direction, but only briefly. The rest of the day was spent with yields drifting sideways near the AM highs, ultimately making for the weakest close since October 9th, but only modestly worse than last Thursday.

Econ Data / Events

ISM Manufacturing Employment (Oct)

46.0 vs — f’cast, 45.3 prev

ISM Manufacturing PMI (Oct)

48.7 vs 49.5 f’cast, 49.1 prev

ISM Mfg Prices Paid (Oct)

58.0 vs 61.7 f’cast, 61.9 prev

Market Movement Recap

10:11 AM Moderately weaker overnight with a modest bounce back after ISM data.  MBS still down an eighth and 10yr up 2.9bps at 4.104

01:05 PM Recovering a bit. MBS down 3 ticks (.09) and 10yr up 2.9bps at 4.105

03:43 PM Broadly sideways at slightly weaker levels.  MBS down an eighth and 10yr up 3bps at 4.106

Bonds were moderately weaker in the overnight session with most of the selling arriving at 7:56am ET when Alphabet filed for a large corporate bond offering, estimated at $15bln. Corporate bond issuance puts upward pressure on rates in several ways and there’s almost always an immediate pop when a new, large deal (like this morning’s) is announced. As a result, 10yr yields were roughly 4bps higher at the open. We saw a small rally in response to tepid ISM manufacturing data, but it doesn’t seem to be sticking.