As a testament to just how confident the market is/was that neither side is overly interested in escalating the Iran war, Tuesday night’s ceasefire deadline has come and gone with surprisingly little fanfare. Yes, the ceasefire was technically extended, but the more relevant point is that oil prices have traded inside a 4 dollar range that covered both the bullish and bearish potential outcomes. We’ve been saying for several weeks that the next big move for the bond market will be reserved for a truly momentous development such as the complete end of hostilities/blockades or a massive escalation into full-blown war. As it stands, it’s a waiting game as Friday is now the earliest window for a potential resumption of peace talks. 
There’s a good case to be made for the market’s lower levels of apparent concern relative to earlier in the war. Simply put, oil prices are not threatening to cross some of the scarier lines in the sand seen in March. The chart below (which uses the 2nd delivery month futures contract to tone down the volatility a bit) shows the scariest line. In addition, it’s worth noting that current prices are merely in the middle of an uptrend that’s been intact a majority of the time since 2015.   In other words, these levels just aren’t alarming enough for genuine market panic.

The consolidation in bonds mirrors the cooling in oil prices.

Today we have a press conference with HUD Secretary Scott Turner and U.S. Federal Housing Director Bill Pulte announcing “a significant development in the U.S. housing finance system” at 12:45PM ET. Rumors run the gamut from “operationalizing” VantageScore to moving control of the FHA & VA programs under Pulte and the FHFA. Meanwhile, the capital markets have a lot on “their” mind, and I received this note. “Rob, I’ve heard that hedge funds own a record percentage of U.S. Treasuries. Does that impact mortgage rates for my borrowers?” Anything impacting supply and demand of fixed-income securities can impact mortgage rates. Per Apollo, you are correct: $6 trillion, or 8 percent of the outstanding debt of our federal government is owned by companies that use complex trading and risk management techniques. U.S. stocks have reached record highs despite the ongoing war with Iran, an oil shock, and warnings of sluggish economic growth. Perhaps investors view the conflict as temporary and expecting resolution, with investors also showing confidence in tech stocks. The stock market is always trying to price what the world is going to look like months from now. Its dog eat dog among hedge funds, and if they collectively think a profit-making opportunity is disappearing, they’ll move quickly. (Today’s podcast can be found here and this week’s ‘casts are sponsored by Experian Verify, a comprehensive income and employment verification solution for mortgage lenders. By uniting instant payroll data, permissioned access, and research verification in one seamless experience, Experian Verify helps lenders reduce friction, accelerate decisions, and confidently verify every U.S. worker. Today’s has an interview with loanDNA’s Neil Sahota on how the mortgage value chain is being reshaped, from origination through servicing, and what that means for lenders trying to stay competitive.)

The new law adds rules, including counseling requirements, which would put severe constraints on originations of HEIs, an industry representative said.

Kevin Warsh, President Donald Trump’s pick to lead the Federal Reserve, denied that he would act as Trump’s “sock puppet” if he’s confirmed and said the president has directed him to lower interest rates.

More than 21% of reverse mortgage clients entered counseling with a deficit in their monthly budget last year, almost double the 12.2% of clients in 2024.

Federal Reserve Gov. Christopher Waller said certain corporate functions at the 12 regional banks, including information technology and human resources, could be consolidated under one structure to increase standardization and reduce costs.

The Chicago-based homeowners received a $41,000 check to pay down a portion of their existing mortgage, freeing them from the lock-in effect, DREAM product provider Takara said.

Wholesale and Correspondent Product and Corporate News Homebridge Financial Services, Inc., one of the nation’s largest privately held non-bank mortgage lenders, has officially signed an agreement to merge with an affiliate of Saluda Grade, a premier independent alternative investment firm (founded in 2019 with approximately $4.4 billion in assets under management). This powerful partnership marks a major leap forward, positioning the combined platform for explosive growth, particularly across the rapidly expanding Non-QM and HELOC space. The executive and management team at Homebridge are continuing with the company. Homebridge and REMN Wholesale will keep their full teams intact, ensuring continuity while unlocking next-level scale, innovation, and market leadership. Introducing HELIX, The Future of Digital Mortgage Lending! As part of this transformation, Homebridge and REMN Wholesale will be launching HELIX, a cutting-edge Digital mortgage lending platform that is miles ahead of anything currently in the market. Built directly from client feedback and engineered with a relentless focus on speed, automation, and elite customer experience, HELIX isn’t just an upgrade—it’s a complete reinvention of the digital mortgage process. This powerful new platform integrates home equity and first lien lending into one seamless ecosystem, dramatically improving both the borrower and MLO experience while driving unprecedented efficiency and scalability.

Technically and officially, today’s average top tier 30yr fixed mortgage rate is the highest since last Monday. The catch is that there hasn’t been much movement since then with the overall range being limited to 0.04%.  Today’s jump was the largest upward movement during that time. There was some upward pressure on rates from stronger employment data in the morning, but the market was even more focused on the uncertain status of US/Iran peace talks.  As the domestic business day winds down, it doesn’t look like there will be concrete news on a ceasefire extension. As such, volatility potential remains elevated heading into Wednesday.

Ceasefire Uncertainty Adds to Losses

Bonds were just a bit weaker this morning after the weekly ADP data. Just before 11am ET, several newswires called ceasefire negotiations into question. Chief among these was a report that Iran had not confirmed its intent to participate. Despite the seemingly significant consequences, bonds only rose about 2bps in terms of 10yr yields. By the 3pm CME close, yields were up less than 4bps on the day and still well inside the prevailing consolidation range. There’s been a bit more weakness since then owing to new headlines indicating that neither Iran nor JD Vance are attending Wednesday’s planned talks in Pakistan. 

Econ Data / Events

ADP Employment Change Weekly

54.75K vs — f’cast, 39K prev

Retail Sales (Mar)

1.7% vs 1.4% f’cast, 0.6% prev

Retail Sales Control Group MoM (Mar)

0.7% vs 0.2% f’cast, 0.5% prev

Pending Home Sales (Mar)

1.5% vs 0.1% f’cast, 1.8% prev

Market Movement Recap

08:32 AM Modestly weaker after weekly ADP data. No reaction to Retail Sales. MBS down 2 ticks (.06) and 10yr up 1.9bps at 4.268

09:44 AM 10yr up 2.4bps at 4.275.  MBS down 5 ticks (.16).

10:51 AM MBS down a quarter point and 10yr up 4.6bps at 4.296

02:44 PM Sideways since previous update. MBS still down a quarter point and 10yr up 4.4bps at 4.295