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It's a pretty simple morning for the bond market (and many other markets). While there's no formal ceasefire, both the U.S. and Iran have indicated a pause in the tit for tat airstrikes that have characterized most of July. Oil dropped sharply on the news though it's not clear exactly how much because markets were fully closed at the time. Still, it's safe to assume a majority of the move in oil/bonds/stocks is directly correlated. This gets 10yr yields just back under the upper line of the long-term trend channel after spending the last 2 days above. Econ data was a non-event this morning, and the calendar doesn't really become consequential until Wednesday afternoon's Fed announcement. 

How Technical Do You Want to Be? There are always multiple technical lenses through which to view market movement, but the simplest involve trendlines and level lines. Yield movement has largely held inside the same high/low trendlines since October 2025, so that's a useful trend to keep tabs on the big picture. On a separate note, it's almost always worthwhile to keep tabs on the most recent long-term highs/lows. The past 2 days have seen yields flirt with both of these technical frameworks. Yesterday, we broke above the upper trendline and the long-term high. Today, we recovered under the long-term high but bounced precisely on that long-term trendline. Is the latter a cause for concern? Not technically. In fact, the last time it happened, was May 22nd, and rates generally moved lower in the following month. When we ask ourselves WHY they moved lower, the answer has nothing to do with technicals and everything to do with oil prices.  Econ Data / Events S&P Global Composite PMI (Jul) 53.6 vs -- f'cast, 51.9 prev S&P Global Manuf. PMI (Jul) 53.8 vs 54.3 f'cast, 53.9 prev S&P Global Services PMI (Jul) 53.6 vs 51.5 f'cast, 51.2 prev Market Movement Recap 09:39 AM MBS up 3 ticks (.09) and 10yr down 1.2bps at 4.684 01:00 PM MBS up 7 ticks (.22) and 10yr down 3bps at 4.666 03:13 PM Well off the best levels. MBS still up 5 ticks (.16) but down an eighth from the highs. 10yr still down 2bps at 4.676 but up almost 3bps from the lows. 

If you're just tuning in, mortgage rates had a rough day yesterday on top of a rough week overall. The result was the highest 30yr fixed rate in over a year with our index moving up to 6.85%. As has been and continues to be the case, rate momentum has been strongly correlated with oil/gas price momentum. With that in mind, it's no surprise to see rates moving lower on a day where oil prices recovered from their recent highs. That's the good news, and it brings the rate index down 0.04% to 6.81%.  The not-so-good news is that 6.81% is still the highest in more than a year apart from yesterday. But longest journeys and single steps... Oil price volatility will remain in focus until the war is definitively over (and more importantly, until oil price volatility actually dies down with prices trending significantly lower). In addition, next week's Fed announcement brings a good amount of surprise potential for the rate market. The Fed is not likely to hike rates, but confirming that will be worth something to the market.

New home sales rebounded modestly in June, recovering some of the previous month's decline, though activity remained below year-ago levels as elevated mortgage rates and affordability challenges continued to weigh on demand. According to the latest Census Bureau and HUD data, sales of new single-family homes rose to a seasonally adjusted annual rate of 628,000 , up 1.6% from May but 5.6% lower than one year earlier. In the bigger picture, this sector has been broadly flat ever since the post-covid volatility died down in early 2023. Inventory edged slightly lower during the month. The number of new homes for sale slipped to 485,000 , down 0.2% from May and 3.2% below June 2025 levels. At the current sales pace, that translated to a 9.3-month supply, down from 9.4 months in May but up from 9.0 months a year earlier. Home prices declined in June. The median sales price fell to $398,300 , down 3.3% from May and 2.7% below its level a year ago. The average sales price also moved lower, dropping to $475,400 , a 9.5% monthly decline and 6.5% below June 2025. As a reminder, home price declines in this data set are not necessarily apples to apples as they can be driven by builders building smaller homes among other variables.

Mortgage application activity rebounded last week as stronger home purchase demand offset a modest decline in refinancing, even with borrowing costs climbing to their highest level since last August. The Mortgage Bankers Association (MBA) reported a 1.9% increase in total application volume on a seasonally adjusted basis for the week ending July 17. Purchase applications increased 6% from the previous week on a seasonally adjusted basis and were 0.2% higher than the same week one year ago. The gain suggests that improving housing inventory continues to support buyer activity despite elevated mortgage rates. Refinance activity moved lower, with the Refinance Index declining 2% from the prior week. Even so, refinance applications remained 7% above year-ago levels, indicating that refinancing demand continues to hold up better than it did a year ago. “Mortgage rates reached another high point last week, with the 30-year conforming rate now at 6.69 percent, its highest level since last August,” said Mike Fratantoni, MBA’s SVP and Chief Economist. “However, purchase volume increased modestly for the week. Growing home inventory in many markets is supporting more purchase activity. Incoming data showed that inflation dropped in June, but with oil prices spiking again, that improvement seems unlikely to continue in July data, and mortgage rates are likely to remain higher as a result.”