US Mortgage Rates fall for the first time in 11 weeks!
The average MBA 30-Year Mortgage Rate for the week ending October 28th fell to 7.06%. This was the first weekly decrease in the benchmark rate in 11 weeks. The previous week’s reading of 7.16% was the highest since 2001. With interest rates this high, the US housing data for September fell in most of the key data points as home buyers moved to the sidelines. Pending Home sales were down 10.2% MoM vs a previous reading of -1.9% MoM. New Home Sales were down 10.9% MoM vs an August reading of +24.7% MoM. Finally, Existing Home Sales were down 1.5% MoM vs -0.8% MoM in August. On the bright side for buyers, the S&P/Case-Schiller Home Prince Index fell 1.6% MoM, although this hardly makes up for the jump in interest rates. The big question housing buys want to know is “Will interest rates fall further below the 2001 levels anytime soon?”
30 Year Mortgage rates in the US are based primarily off the 10-year US Treasury Yield. After breaking above a symmetrical triangle (red) early in 2022 near 1.69%, yields began moving aggressively higher. Yields moved to 3.497% on June 14th and pulled back to 2.56% in August 2nd. This set up an ascending wedge formation. Expectations are that the yield will break lower out of an ascending wedge. However, as price neared the apex, it initially broke above the formation on October 20th, reaching a high of 4.335% on October 21st. Notice that the RSI was diverging with yields in overbought territory. Thus, yields have since pulled back to the bottom trendline of the wedge, making a near-term low of 3.90%.
Source: Tradingivew, Stone X
Trade 10 year Treasury bonds now: Login or Open a new account!
• Open an account in the UK
• Open an account in Australia
• Open an account in Singapore
Heading into the November FOMC meeting, the US 10-year Yield has pulled back and is oscillating around 4%. If the key yield breaks higher after the FOMC meeting, first resistance is at the lows of October 24th near 4.13%, then the top trendline of the long-term wedge near 4.23%. If yields continue higher and breakthrough the October 24th highs of 4.335%, they could be on the way to 4.473%, the highest level since November 2007! However, if the resistance holds and 10-year yields move lower, the first support is at the 38.2% Fibonacci retracement level from the lows of August 2nd to the highs of October 21st at 3.64%. Below there, yields can fall to the highs of June 14th at 3.497% and then the 50% retracement of the previously mentioned timeframe at 3.426%.
Source: Tradingivew, Stone X
When will the housing market turn up again? This will most likely be after mortgage rates move lower, which will depend on the movement of the US 10-year treasury yield. Watch the Fed later today. A 75bps rate hike is already priced. However, traders need to pay attention to the statement and the press conference which follows to determine if the Fed will slow the pace of hikes moving forward!
Learn more about forex trading opportunities.
This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.
StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.
In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.
StoneX Financial Pte. Ltd. is not under any obligation to update this report.
Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit www.cityindex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.
ALL TRADING INVOLVES RISKS. LOSSES CAN EXCEED DEPOSITS.
City Index is a trading name of StoneX Financial Pte. Ltd. (“SFP”) for the offering of dealing services in Contracts for Differences (“CFD”). SFP holds a Capital Markets Services Licence issued by the Monetary Authority of Singapore for Dealing in Exchange-Traded Derivatives Contracts, Over-the-Counter Derivatives Contracts, and Spot Foreign Exchange Contracts for the Purposes of Leveraged Foreign Exchange Trading. SFP is also both Derivatives Trading and Clearing member of the Singapore Exchange (“SGX”). SFP is a wholly-owned subsidiary of StoneX Group Inc.
The information provided herein is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to invest, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk.
The information does not represent an offer of, or solicitation for, a transaction in any investment product. Any views and opinions expressed may be changed without an update. To understand the risks and costs involved, please visit the section captioned “Important Information” and the “Risk Disclosure Statement”.
The information herein is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation.
StoneX Financial Pte. Ltd. 1 Raffles Place, #18-61, One Raffles Place Tower 2, Singapore 048616. Tel: 6309 1000. Co. Reg. No.: 201130598R.
This advertisement has not been reviewed by the Monetary Authority of Singapore.
© City Index 2024