As we bid farewell to 2023, a year that witnessed mortgage rates climbing to 8%, the market prepares to welcome 2024 with optimism. Today’s market movement is relatively subdued, reflecting the typical end-of-year thin volume.
Current Market Movements
Mortgage Securities: Slightly down by seven basis points, continuing the trend from yesterday. However, the significance of these movements is limited due to the reduced trading volume at year-end.
10-Year Treasury Yield: Maintaining a favorable downward trend and currently fluctuating around 3.86-3.87%, indicating a stable market environment within the established trading range.
Upcoming News and Expectations
Jobs Week Ahead: Next week is crucial, with the release of the ADP report on Thursday, and we expect job creation between 130,000 and 150,000 for December. The unemployment rate is projected to increase from 3.7% to 3.8%.
Fed Minutes Release: On Wednesday, the market anticipates the release of the Federal Reserve’s minutes from the December 13th meeting, which could offer valuable insights following their dovish stance in December.
Holiday Schedule
Early Close: The bond market will close today at 2:00 PM Eastern Time.
Market Closure: Markets will remain closed all day on Monday, resuming normal operations on Tuesday.
Year-End Reflections and Wishes
A Look Back: 2023 has been a challenging year for the mortgage market, marked by high rates and cautious optimism.
Forward Outlook: The anticipation for 2024 is laced with hope for more favorable conditions and a potentially more dynamic market.
Technical Analysis: Key Levels to Watch
Mortgage Bonds: Currently down by seven basis points, indicating a slight retreat but within expected limits.
10-Year Treasury Yield: Showing signs of stabilization under the crucial 3.90-3.93% ceiling, suggesting the market remains healthy.
Key Focus: The upcoming jobs data will significantly shape the market’s direction in the early days of 2024.
As we conclude 2023 and step into 2024, we extend our gratitude to the MBS Highway community. Though filled with challenges, the past year’s journey has also been a learning experience. We remain committed to providing insightful market analysis and look forward to continuing this journey with you in the new year. We wish everyone a prosperous 2024!
