Capital Markets Update for the Week of 8/31/21

Interest rate-wise, not much news to report.

It is often an unremarkable week leading up to the monthly jobs number, and this time around we have the August payrolls data on Friday providing one more data point towards the Fed’s tapering timeline. Pending home sales unexpectedly declined (1.8 percent in July) for the second consecutive month. Higher prices and limited inventory deterred some homebuyers. Separately, MBA’s latest Forbearance and Call Volume Survey was unchanged relative to the prior week at 1.6 million.

Today’s economic calendar gets under way shortly with Redbook same store sales, followed in rapid succession by June home prices from both S&P/Case-Shiller and FHFA, Chicago PMI, and consumer confidence for August. The day rounds out with Dallas Fed Texas services. The Desk will conduct two MBS purchase operations targeting up to $4.6 billion of conventionals. We begin the day with Agency MBS prices roughly unchanged from Monday’s close and the 10-year yielding 1.29 after closing yesterday at 1.29 percent.

Market commentary by Rob Chrisman