UMBS are pretty much flat – up 6 bps this morning.  Stocks about the same with S&P futures up 4 pts

While ECI has been an increasingly important report over the past 2 years, today’s result is not far enough from the forecast to have a big impact.  Bonds certainly traded in high volume from 8:30-8:31am, but not enough to erase much of the overnight improvement.

BOJ Removes Yield Curve Control Cap (good for bonds).  Will tolerate yield over 1%.  Expect more inflation.

Lots of softer data in Europe (good for bonds)

Employment Cost Index (ECI) = 1.1 vs 1.0 f’cast, 1.0 prev

Consumer confidence fell in October, according to the Conference Board.  October’s retreat reflected pullbacks in both the Present Situation and Expectations Index. Write-in responses showed that consumers continued to be preoccupied with rising prices in general, and for grocery and gasoline prices in particular. Consumers also expressed concerns about the political situation and higher interest rates. Worries around war/conflicts also rose, amid the recent turmoil in the Middle East.

Home prices rose 0.4% month-over-month and 2.6% year-over-year according to the Case-Shiller Home Price Index. We are definitely seeing a reversal of fortunes regionally, with the strongest areas of 2020-2022 (Phoenix, Las Vegas) underperforming, while the weakest areas since the Great Recession (New York, Chicago, Detroit) now outperforming.

The FHFA House Price Index increased 0.6% MOM and 5.6% YOY.

Apartment List said rents fell 0.7% in October and are still down 1.2% YoY.  That’s for new leases though.   Renewals are up 4.5%.  Blended it’s 2.9%

The first two days of the week have had the least to offer in terms of scheduled economic data and events.  Yesterday’s major exception was the Treasury refunding announcement and today’s was the Bank of Japan announcement in the overnight session.  Neither had any lasting impact on the bond market, interestingly enough.  In today’s case, it was the European economic data that did the most to start the day off with lower rates, but most of the gains were erased after the Employment Cost Index came out just a bit stronger than expected for Q3.  Traders will have to continue to wait for better data-based evidence of “cracks.”

According to the Journal, Guaranteed Rate and its affiliates are going after hundreds of LOs who signed six- and seven-figure bonuses but no longer work there. In some cases, those LOs found new jobs. In others, they were fired shortly before the date when the lender could no longer ask for the bonus back, the Journal reported.

For its part, Guaranteed Rate told the Journal in a statement that it is “not going to be apologetic about exercising our legal rights to recover our money.”

What G-Rate is doing is hardly unique. Other retail lenders, such as Nations Lending and CrossCountry Mortgage, are also going after former LOs for their bonuses. They’re desperate for money and hey, those LOs signed a contract.

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