Treasuries are little changed this morning, with front-end yields down 1-2 bps and long-end yields up 1-2 bps. The 2-year/10-year yield spread was briefly inverted yesterday afternoon for the first time since 2019, leading to another round of opinion pieces on recession signals. US equities are struggling ahead of the open, with futures down 40-60 bps an hour before the open. Contributing to the negative risk sentiment was Kremlin officials saying they see “no breakthrough” in peace talks with Ukraine, which also has oil prices up approximately 3% on the day.
The MBA mortgage applications index fell 6.8% last week, led by a 14.9% decline in refinance applications. That adds up to a 2-week decline of 29.3% and pushes the refi index to a 3-year low. The MBA reported that the average contract rate for a 30-year conventional mortgage rose 30 bps last week to 4.8% and is now up approximately 150 bps YTD. Purchase applications were also somewhat muted last week, rising just 0.6% following a 1.5% decline the prior week. On a year-over-year basis, purchase applications were down 10.1% last week.
Jason Haley
Chief Investment Officer
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