Morning Report: Global Sovereign Yields continue to climb

Posted on October 4, 2023 by Brent Nyitray

Vital Statistics:

Global sovereign bond yield continue there relentless march higher, with the 10 year approaching 4.9% in the overnight session. We are seeing a bit of a reprieve this morning after the weak ADP print.

The bond sell-off is global, with the Japanese Government Bond yield breaking through 0.8% and the German Bund touching 3%.

The economy added 89,000 jobs in September, according to the ADP Employment Report. “We are seeing a steepening decline in jobs this month,” said Nela Richardson, chief economist ADP. “Additionally, we are seeing a steady decline in wages in the past 12 months.” Interestingly, we saw a decrease in professional / business services, which saw the biggest increase in job openings in yesterday’s JOLTS report. Pay growth for job stayers decelerated to 5.9% while pay growth for job changers decelerated to 9%.

Mortgage applications fell 6% last week as purchases fell 5.7% and refis fell 6.6%. The applications index hit the lowest level since 1996. “Mortgage rates continued to move higher last week as markets digested the recent upswing in Treasury yields. Rates for all mortgage products increased, with the 30-year fixed mortgage rate increasing for the fourth consecutive week to 7.53 percent – the highest rate since 2000,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “As a result, mortgage applications grounded to a halt, dropping to the lowest level since 1996. The purchase market slowed to the lowest level of activity since 1995, as the rapid rise in rates pushed an increasing number of potential homebuyers out of the market. ARM loan applications picked up over the week and the ARM share increased to 8 percent, as some borrowers searched for ways to lower their payments.”

Atlanta Fed President Raphael Bostic sees only one rate cut in 2024. “I am not in a hurry to raise, but I am not in a hurry to reduce either,” Bostic said Tuesday at an event in Atlanta, referring to the US central bank’s benchmark interest rate. “I want us to hold. I think that’s the appropriate thing to do, for a long time.” He has been one of the more dovish Fed Presidents.

A last-minute bipartisan budget agreement was reached over the weekend, which kept the Federal Government and the National Flood Insurance Program (NFIP) operating for another 45 days into mid-November.  While the NFIP has measures which prevent a true lapse in the case of a government shutdown, it is smart for lenders to understand how to address flood insurance in case a shutdown occurs. A lender can place the insurance application in the borrower’s file as proof and move forward with closing. Alternatively, lenders can purchase WYO of Private Flood Insurance. Pinnacle Property Data is a boutique vendor management company that specializes in flood certifications and offers flood certifications from ServiceLink National Flood. They work with many of the largest lenders in the industry to reduce costs on flood certifications and provide unique value add products for free. Pro tip: Have your loan officers get flood insurance requirement data for free and if flood insurance is required, get an instant quote here https://pinnacle.rocketflood.com/ . Now is the time to look at process improvements and efficiencies! Contact us today to see how we can save you money on your flood certification program! 602-561-6791 or sasha@pinnpropdata.com

The services economy expanded in September, albeit at a slower rate, according to the ISM Services Index. There has been a slight pullback in the rate of growth for the services sector, which is attributed to slower rates of growth in the New Orders and Employment indexes. The majority of respondents remain positive about business conditions; moreover, some respondents indicated concern about potential headwinds.” Employment growth decelerated, while pricing was flat on a month-over-month basis.

Filed under: Economy |

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22 Responses

  1. jnc4p's avatar
    jnc4p, on October 4, 2023 at 10:32 am said:

    Not sure how the House Republican Speaker fight will shake out but the media framing continues to be dishonest and annoying:

    The answer to the question “Why Is the Public’s Business at the Mercy of a Few Extremists?” is because almost every single Democrat voted with the “extremists” as well, but they all get a pass from the media on the resulting consequences. All that they needed was for a dozen or so to vote present or abstain and then the “extremists” wouldn’t have won.

    What actually happened is that a majority of the House, not just “a Few Extremists” voted McCarthy out of his position. The resulting impact to “the Public’s Business” is on all of them.

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    • Let the mutherfuker burn!'s avatar
      Let the mutherfuker burn!, on October 4, 2023 at 11:07 am said:

      I’m having a hard time caring about this as there were no good options in January to begin with. I cannot think of one reason why ANY Republican should be trusted to rein in government. In the end, if this delays Ukraine funding one little bit then I’m happy with that. If this causes MID some extra cash to re purchase politicians, then good.

      It’s not like McCarthy and the House Republicans have covered themselves in glory serving as a check on Biden. If their actions constitute checks and balances…

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    • Let the mutherfuker burn!'s avatar
      Let the mutherfuker burn!, on October 4, 2023 at 11:47 am said:

      From now on, intra-party fights will no longer be off-limits for the opposition.

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  4. Brent Nyitray's avatar
    Brent Nyitray, on October 6, 2023 at 2:21 pm said:

    Are the letting the mask slip or just not even bothering to hide it any more?

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  5. Brent Nyitray's avatar
    Brent Nyitray, on October 6, 2023 at 3:44 pm said:

    Taibbi’s latest.

    https://www.racket.news/p/have-they-gone-mad

    Hillary wants re-education camps

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  6. Let the mutherfuker burn!'s avatar
    Let the mutherfuker burn!, on October 6, 2023 at 9:04 pm said:

    Just saw taibbi on Gutfeld.

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  10. Let the mutherfuker burn!'s avatar
    Let the mutherfuker burn!, on October 10, 2023 at 5:44 pm said:

    Somewhat suspicious of the 40 executed babies, some beheaded.

    If true it justifies a lot of actions. Plus it probably cleaves Hamas from middle eastern government.

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