UMBS are up 5 bps on the morning.

Nasdaq 100 futures are under pressure, with Nvidia Corp. set for a third day of losses as investors cooled on tech’s sky-high valuations.  Nvidia slid 3% in early trading, taking its market value further below Apple Inc. and Microsoft Corp. France’s Eurofins Scientific SE was the main stock mover in European trading, shedding 20% after the laboratory-testing company was targeted by Carson Block’s Muddy Waters Research.

Markets are heading into a period filled with political risks, with the first voting round of the French parliamentary election on Sunday and polls showing gains for the far-right National Rally. Tuesday will bring the first US presidential debate between Joe Biden and Republican challenger Donald Trump.

The week ahead will have a lot of real estate data, with home prices and pending home sales. We will get the third revision to Q1 GDP and get personal incomes / outlays on Friday which will give us the all-important PCE Price Index.

Existing home sales fell 0.7% MOM in May, according to NAR. This is a decline of 2.8% compared to a year ago. The median home price rose 5.8% on a YOY basis to $419,300. There are about 1.28 million units for sale, which represents a 3.7 month supply at the current sales pace. A balanced market is 6 – 7 months’ worth of supply.

The FHFA conditionally approved Freddie Mac’s 2nd lien pilot lending program but did listen to industry concerns about crowding out the private sector.  The 18-month program will be limited to $2.5b and then reassessed.  There will be a $78,277 max borrowing amount on loans that are at least 24 months seasoned. Questions remain as to the ability to refinance the 2nd lien without the 1st; pricing; how the 2nd liens will be securitized.

It was a snoozer of a day for bonds with yields and MBS prices holding well inside last Friday’s ranges for the entirety.  An “inside day” isn’t much of a surprise when the calendar is completely empty in terms of major economic data.  In fact, it was devoid of all manner of economic data.  That left only a few Fed speeches and as is the recent norm, Fed speakers are all saying the same things (thus, no surprises for bonds). At the 3pm close, both Treasuries and MBS were perfectly unchanged.

UMBS closed the day up 5 bps at 100.72

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