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Eagle Bay Mortgage, L.L.C.
John Matteucci
Eagle Bay Mortgage, L.L.C.
NMLS#: 268001
Phone: 321-806-1013
Weekly Market Preview

What's on the agenda for this week?

Very early this morning the 10-yr. note yield dropped to 1.22%, 6 bps lower than Friday; by 9 am ET the yield inched up to 1.26%, -2 bp. MBS prices were 6 bps from Friday’s close.

This is going to be a critical week with the FOMC meeting, a number of key economic releases, and Treasury auctioning $183B of 2s, 5s, and 7s. That’s the calendar. Then we have the Senate negotiating a $579B infrastructure package that is expected to be concluded this week. The White House and Democrats on Sunday night made an offer aimed at covering all outstanding issues. On August 8th Congress is scheduled to go on a five week break; before that happens the bill has to get passed, and Congress must increase the federal debt limit or the government will have to close down.

Tapering is the prime subject this week for the FOMC. Markets are expecting the Fed to lay out more information on the timing of the Fed to sell treasuries and MBSs in their portfolio that have been increasing at $120B a month for years. MBSs are the leading candidate for a tapering plan. It won’t be quick. When it begins, the Fed (likely at the end of the year) will take it slow in its selling. A few less knowledgeable Fed officials said last week that selling MBSs is necessary to slow down the hot housing market; guess they think that if mortgage rates were higher that the lack of inventory would correct itself?

Inflation is increasing. Regardless of the lack of concern, prices are going up. Is Powell correct that it is temporary? Markets are beginning to wonder, as prices continue to increase on new cars, used cars, food, energy, and the list is getting longer. The supply chain that was expected to improve is now being questioned as the Delta virus spreads throughout the world. Even if the worst of the new outbreak is concentrated among less-vaccinated communities, economists see it potentially changing consumers' willingness to spend and travel. They say it will likely require the Fed to strike a balance between keeping faith in the recovery while taking explicit stock of what could go wrong.

What’s your FICO score? Who cares? Increasing numbers of lenders are abandoning FICO with their own metrics, seen in big banks and progressing throughout the lending world, including mortgages, increasing the belief that FICO is excessively limiting loans and increasing interest rates on those with low scores. Capital One, Synchrony, Chase and BofA are challenging the use of FICO. Fannie and Freddie are considering allowing lenders to use other scores when evaluating mortgage applicants. Regulators are concerned that FICO leaves too many having to rely on payday loans and other costly credit costs. 53 million adults don’t have FICO scores because they don’t have borrowing histories, and lack of borrowing history using FICO harms credit ratings….don’t borrow and your FICO scores decline.

At 9:30 am the DJIA opened -44, NASDAQ lost -28, and the S&P was down -4. The 10-yr. note stood at 1.28%, unchanged from Friday and up +4 bps from 4:30 this morning. The FNMA 2.0 30-yr. coupon added +3 bps from Friday’s close and +14 bps from the same time on Friday; FNMA 2.5 30 -yr. coupon was up +3 bps from Friday’s close and +12 bps from Friday.

At 10 am June new home sales were weak, expected at 800K, but reported at 676K and may be revised.

At 1:00 pm The Treasury will sell $60B of 2-yr. notes; it won’t have any impact at the long end of the curve, including MBS prices.

This Week’s Economic Calendar:


10:00 am ET June new home sales (expected +800K, as reported 676k)

1:00 pm ET $60B 2 yr. note auction


FOMC meeting begins

8:30 am ET June durable goods orders (+2.1%, ex transportation orders +0.8%, core capital goods 0.0%)

9:00 am ET May Case/Shiller home price index +1.5%, yr./yr. +15.3%)

10:00 am ET July consumer confidence index (124.9 from 127.3)

1:00 pm ET $61B 5 yr. note auction


7:00 am ET weekly MBA mortgage applications

8:30 am ET advance June US trade deficit (-$88.7B)

2:00 pm ET FOMC policy statement

2:30 pm ET Jerome Powell’s press conference


8:30 am ET weekly jobless claims (390K from 419K the prior week)

Q2 advance GDP (+8.0%, PCE annual +11.4%)

10:00 am ET June pending home sales (-0.8%)

1:00 pm ET $62B 7 yr. note auction


8:30 am ET June personal income and spending (income -0.7%, spending +0.6%; PCE index +0.6% from 0.4%, yr./yr+4.1%, core PCE +0.5%, yr./yr. +3.7%)

Q2 employment cost index (+0.9%, yr./yr. +2.8%)

9:45 am ET July Chicago purchasing mgrs. index (66.1 unch from June)

10:00 am ET final U. of Michigan July consumer sentiment index (80.8 unch from the mid-month index)

PRICES @ 10:05 AM ET

Libor Rates: 1 mo. 0.086% 3 mo. 0.111%; 6 mo. 0.158%; 1 yr. 0.241% (7/23/21)

30 yr. FNMA 2.0: @9:30 101.72 +3 bp (+14 bp from 9:30 am ET Friday)

30 yr. FNMA 2.5: @9:30 103.95 +3 bp (+12 bp from 9:30 am ET Friday)

30 yr. GNMA 2.5: @9:30 103.52 +13 bp (+22 bp from 9:30 am ET Friday)

Dollar/Yuan: $6.4837 +$0.0023

Dollar/Yen: 110.29 -0.26 yen

Dollar/Euro: $1.1808 +$0.0037

Dollar Index: 92.62 -0.30

Gold: $1803.30 +$1.50

Bitcoin: 38,348 +3867

Crude Oil: $71.95 -$0.12

DJIA: 35,005 -56

NASDAQ: 14,860 +22

S&P 500: 4412 +1

About John Matteucci

With over 25 years experience, I have the expertise necessary to help borrowers achieve their financial dream. Whether you are a first time home buyer or a borrower looking to refinance an existing mortgage, I will find you the best product that meets your needs at the lowest price.

About This Report And Disclosure Information

All information furnished has been forwarded to you and is provided by thetbwsgroup only for informational purposes. Forecasting shall be considered as events which may be expected but not guaranteed. Neither the forwarding party and/or company nor thetbwsgroup assume any responsibility to any person who relies on information or forecasting contained in this report and disclaims all liability in respect to decisions or actions, or lack thereof based on any or all of the contents of this report.

NMLS # 1215155 Licensed Florida Mortgage Broker # MBR1605 Licensed Virginia Mortgage Broker # MC-5869