WTMS Blog Today = What’s up in Mortgage Today (AM) – 12/24/2025

Bond markets opened with a holiday twist today – they’re technically open but running on skeleton crews. While many government employees have Christmas Eve off, these aren’t official federal holidays, so bond trading continues with early close at 2pm ET. Most human traders already made their decisions yesterday, leaving today’s session to automated systems.

Initial jobless claims surprised to the downside at 214k versus the 223k forecast, but markets barely blinked. Continuing claims rose to 1.923 million from 1.897 million expected. The labor market shows 2025 running slightly above 2024 levels but nothing suggesting major concern.

UMBS securities posted modest gains with the 5.0 coupon up 5 basis points to 99.69 and the 5.5 coupon advancing to 101.30. GNMA bonds followed similar patterns with the 5.0 coupon reaching 99.71. Treasury yields declined across the curve with the 10-year dropping 11 basis points to 4.156%.

The day’s economic calendar was light with only jobless claims data and a 7-year Treasury auction scheduled for 11:30am ET. MBA mortgage applications fell 5% last week despite slightly lower rates, with both purchase (-4%) and refinance (-6%) activity declining. Applications remain significantly higher year-over-year, up 16% for purchases and 110% for refinances.

Locking vs Floating

Holiday trading mode brings unpredictable movement that can happen for no apparent reason. Bond markets typically drift sideways during the second half of December despite wider potential ranges. The next risk for meaningful volatility won’t come until the first week of January when normal trading patterns resume.

Today’s Events

– Continued Claims: 1,923K vs 1,897K forecast
– Jobless Claims: 214K vs 223K forecast
– 7-Year Note Auction: $44 billion at 11:30am ET

Bond Pricing

UMBS 30 yr
| Coupon | Price | Intra-Day Change |
| 5.0 | 99.69 | 0.05 |
| 5.5 | 101.3 | 0.05 |
| 6.0 | 102.57 | 0.03 |

GNMA 30 yr
| Coupon | Price | Intra-Day Change |
| 5.0 | 99.71 | 0.04 |
| 5.5 | 100.9 | 0.04 |
| 6.0 | 101.93 | 0.01 |

Treasuries
| Term | Yield | Price | Intra-Day Yield Change |
| 2 yr | 3.526 | 99.95 | -0.006 |
| 3 yr | 3.577 | 99.784 | -0.007 |
| 5 yr | 3.734 | 99.506 | -0.002 |
| 7 yr | 3.929 | 98.914 | -0.008 |
| 10 yr | 4.156 | 98.738 | -0.011 |
| 30 yr | 4.814 | 97.015 | -0.011 |