This is Matt Graham with the MBS Live Market Update. This week’s segment will be a little bit shorter than normal because there is so very little to discuss in this market environment. What environment is that? Simply put it as to hurry up and wait. What are we waiting for? Well, the Iran War is the only market mover of note right now for energy prices and bonds, it definitely has an impact on stocks as well, but stocks are benefiting from earning season and general AI related optimism in our sort of off in our own world, setting new all-time highs on many recent days. Last week saw the ceasefire deadline expire in the war, and there was an indefinite extension shortly thereafter. The bond market was obviously hoping for a more definitive deescalation instead of the limbo that we were left with and as such, we saw yields pull back gradually over the course of the week. That said it was not nearly to the levels seen at the end of March. Same story for oil prices, and that movement was heavily correlated as has been the case. For the past two months now heading into the weekend, we knew that Iran’s foreign minister was in Pakistan, and that diplomats from the US were planning on going to Pakistan on Saturday morning, and there was at least a chance that they would be discussing the peace process. That created a two-way risk for bonds and oil heading into the weekend where any sort of major breakthrough would likely have been really good for the bond market and would’ve pushed oil prices down, whereas an absence of negotiations or a breakthrough would probably push things back up. We got the latter, but it was not anything too onerous for the bond market. And that’s a little bit surprising or at least enlightening considering that the US diplomats never even went to Pakistan despite that bond yields only a few bips higher to start the new week, oil prices rose but not back to levels seen at the end of last week. So we’re left with the sense that the market is really just waiting for a confirmation that peace is on the way rather than react. Too negatively to an absence of peace at this point. It would really take a major re-escalation in the fighting for bonds and oil to be too bothered, and there is probably a decent rally to be had in the bond market. When an official piece is finally confirmed, choppiness can continue to come from those significant war related headlines if they happen, and to a far lesser extent from economic data. We had retail sales last week come in quite a bit higher than expected, and it didn’t really move the needle at all in the week ahead. We do have slightly more economic data, but still not the super big ticket data that we will have next week when the big jobs report comes out. That’s gonna do it for this week. Back to you.
Matt Graham, Founder and CEO, MBS Live
Matt began as an originator in 2002. He fell in love with the idea of following MBS in real-time but felt that existing products were only scratching the surface. Thus was born MBS Live in 2007, the first-of-its-kind platform with real-time market data/analysis, and live chat with analysts, traders, and originators around the country. He is currently the Founder and CEO of MBS Live!
He’s been covering bond/mortgage markets, writing commentary, alerts, and chatting with the live community every business hour of every business day ever since.
Matt also serves as the Chief of Operations for mortgagenewsdaily.com, where he is one of the industry’s most respected mortgage rate experts, frequently quoted in the media. Mortgage News Daily’s rate index is used as the definitive resource on day-to-day mortgage rate averages.
He lives in the Pacific Northwest with his wife and son where he enjoys skiing, fishing, coaching youth sports, playing the guitar, and more DIY projects/hobbies than he’d care to admit.