WTMS Blog Today = What’s up in Mortgage Today (AM) – 11/05/2025

Bond markets are taking a beating this morning after two key economic reports delivered unwelcome news. ADP Employment came in at 42,000 jobs versus an expected 25,000, while ISM Services soared to 52.4, well above all economist estimates. The combination has pushed 10-year Treasury yields up nearly 6 basis points to 4.144%, directly pressuring mortgage rates higher.

The government shutdown has amplified today’s market impact by forcing traders to rely on private data reports like ADP. With the Labor Department dark, this morning’s ADP reading carries extra weight in assessing labor market conditions. ISM Services business activity jumped to 54.3, showing the largest part of the economy expanding faster than anticipated.

MBS prices are down a quarter point across most coupons, with UMBS 5.0s falling to 99.33. GNMA securities are showing similar weakness, pressuring the rates you can offer borrowers today. Volume has spiked to the day’s highest levels as selling accelerates following the data releases.

The ISM Services prices paid index hit 70.0, the highest reading since October 2022, signaling persistent inflationary pressures. This inflation concern, combined with stronger than expected job growth, reduces the likelihood of aggressive Fed rate cuts ahead. Markets had been pricing in a 70% chance of a December rate cut, but those odds are now being recalibrated.

Locking vs Floating

Volatility risks are running higher than normal due to the concentrated economic data releases in a shortened window. The combination of ADP and ISM Services created immediate momentum against bonds, with 10-year yields jumping from 4.108 to 4.144 in rapid succession. MBS are roughly unchanged despite Treasury weakness, but this divergence may not hold if selling continues.

Today’s Events

– ADP Employment: 42k vs 25k f’cast, -32k prev
– ISM Biz Activity (Oct): 54.3 vs — f’cast, 49.9 prev
– ISM N-Mfg PMI (Oct): 52.4 vs 50.8 f’cast, 50.0 prev
– ISM Services Employment (Oct): 48.2 vs 47.6 f’cast, 47.2 prev
– ISM Services New Orders (Oct): 56.2 vs 51.0 f’cast, 50.4 prev
– ISM Services Prices (Oct): 70.0 vs 68.0 f’cast, 69.4 prev

Bond Pricing

UMBS 30 yr
| Coupon | Price | Intra-Day Change |
| 5.0 | 99.4 | -0.18 |
| 5.5 | 100.97 | -0.1 |
| 6.0 | 102.25 | -0.02 |

GNMA 30 yr
| Coupon | Price | Intra-Day Change |
| 5.0 | 99.59 | -0.21 |
| 5.5 | 100.76 | -0.1 |
| 6.0 | 101.77 | 0 |

Treasuries
| Term | Yield | Price | Intra-Day Yield Change |
| 2 yr | 3.616 | 99.778 | 0.038 |
| 3 yr | 3.629 | 99.637 | 0.046 |
| 5 yr | 3.744 | 99.462 | 0.046 |
| 7 yr | 3.931 | 99.663 | 0.056 |
| 10 yr | 4.137 | 100.917 | 0.054 |
| 30 yr | 4.717 | 100.532 | 0.052 |