As the flames continued to spread, banks closed more branches while others donated to relief efforts.

New chairs Nanci Weissgold and Bill Nelson both also sit on the trade association’s board of directors.

Unless something incredibly interesting happens in the next 3 hours, this morning’s commentary will likely be the end-of-day commentary as well.  Due to the national day of mourning, bonds will close early at 2pm ET, and there are no scheduled economic reports from government sources.  Traders are taking the half-day mentality seriously with 8am-9am volume less than half of yesterday’s.  As hoped, there’s been some gradual relief after the end of the week’s auction cycle yesterday, but considering the price, it still hasn’t been worth it.  In other words, yields are still higher than they were at the start of the week.  Friday’s jobs report has the first right of refusal to prompt the next big move, for better or worse.

“My buddy’s wife complains about constantly being sexually harassed at work. He told her she can stop working from home and go back to the office if she doesn’t like it.” “Home” means a lot, especially when it is lost. The nation is watching the loss of life and homes in LA county. Prior to the pandemic many LOs and AEs worked from home, but since then corporate types have kept an eye on the big banks and investment banks for WFH (work from home) versus return to the office clues. JPMorgan has had enough and is now going back to five days in the office. Citi, however, is still on a “three days in the office” schedule. Efficiency is good, but you lose the water cooler synergy and familiarity. People need a place to live, but not necessarily a place to work. In terms of homes, inventory for sale has been an issue for years, and will continue to be in many markets. It’s hard to increase housing units when they’re lost to fires, floods, and wind. A recent STRATMOR blog is “A Lender’s Personal Touch Can Help After a Disaster.” (Today’s podcast can be found here and this week’s is sponsored by CoreLogic. CoreLogic gives mortgage professionals the tools they need to establish long-term relationships with their clients, helping them keep future business in-house and transforming the way they do business. Today’s has an interview with homeowner and landlord Suzy Alvarez on how she chooses lenders, where the borrower experience can be improved, and what she wished she knew before buying her first home.)

Mortgage rates are driven by movement in the bond market and bonds were on a shortened schedule today due to the federal day of mourning for Jimmy Carter.  As such, volume and volatility were in short supply. Still, overnight market movement allowed the average lender to offer a microscopic improvement versus yesterday. Tomorrow (Friday, Jan 9th) is a different story.  The big jobs report comes out at 8:30am ET. Bonds routinely react to this report more than any other scheduled monthly data.  In other words, there is much higher potential for volatility tomorrow as that reaction plays out. As always, there is no way to know which direction things will move in response to economic data until we actually have the data in hand.  As always, it’s not whether the data is higher or lower than last time, but rather, how it comes in compared to the median forecast. In this case, the median forecast for job creation is 160k, much lower than last month’s 227k.  If jobs were to come in under 100k, rates would likely improve.  If the number is over 200k, rates would likely rise. The unemployment rate is also a consideration.  It’s expected at 4.2%. Higher is better for rates, and vice versa.

No Data, No Volatility

Bonds were only open for half the day due to the national day of mourning for Jimmy Carter.  Overnight markets made for a slightly stronger start and those gains slowly eroded throughout the day.  MBS closed at perfectly unchanged levels and 10yr yields were a hair lower as Treasuries continue “healing” after this week’s auction cycle.  Friday morning brings the jobs report, which is just as much of a potential volatility flash point as it always is.

Market Movement Recap

10:25 AM Stronger overnight, with some slight backtracking.  MBS up 3 ticks (.09) and 10yr down 3.3bps at 4.669

12:24 PM weakest levels. MBS still up 2 ticks (.06) and 10yr still down 2.5bps at 4.676

In the US, the 10-year Treasury yield rose as high as 4.73% Wednesday, pushing it toward the 5% peak hit in October 2023, before pulling back down.

The financial data firm Intercontinental Exchange is buying the firm that runs the Ameribor interest rate benchmark, which some community and regional banks back as a LIBOR alternative.

Bayview Asset Management and three affiliates settled multistate allegations that their handling of a 2021 data breach failed to meet certain standards.

The Department of Justice alleges that The Mortgage Firm failed to serve majority Black and Hispanic neighborhoods in the Miami metropolitan area.