In today’s update, Mortgage-Backed Securities (MBS) opened flat, up 6 bps, while S&P Futures gained 12.75 points.

Overnight, bonds strengthened due to a rally in European bonds, but stocks held steady amid Israel tensions. 10-year Treasury yields fluctuated, ranging from 4.544% to 4.57% after hotter Producer Price Index (PPI) data.

Bank of America labeled the current U.S. bond bear market the worst ever, with 30-year bond losses at 50%. Hedge funds increased their short positions, reaching a historic high.

Some Fed officials, like Minneapolis Fed President Kashkari, believe recent rate increases might cool the economy without more rate hikes.

Lenders prepare for higher 2024 loan limits, with companies like Guaranteed Rate, Penny Mac, and Rocket offering up to $750k loans.

Fannie Mae changes multi-family LTVs, allowing 95% on 2-4 unit properties from 11/18/23.

The Consumer Financial Protection Bureau (CFPB) sued Freedom Mortgage for data errors, violating HMDA and a 2019 consent order. In August 2023, the CFPB fined Freedom $1.75 million for illegal kickbacks.

A 10-year Treasury auction yielded 4.61% versus 4.592% when-issued, with a bid-to-cover ratio of 2.50x.

Geopolitical concerns, global economic uncertainty, and a consensus among Fed speakers about a shifting rate outlook continue to drive bond market rallies. Market watchers await Thursday’s Consumer Price Index (CPI) data for potential impact on market direction.