Bonds closed near their lows — 30yr conventional rate reprices to 6.49%, up 7bps; UMBS 5.0 settles at 98.52, down 37 ticks from Friday's close; 10yr Treasury yield ends at 4.41%.

Monday was a one-way trade. UMBS 5.0 opened at 98.67, drifted lower through the morning, and bottomed near midday at 98.51. The afternoon session offered no recovery — the market closed at 98.52, essentially on the lows. The 10-year yield climbed 5.4 basis points from Friday's finish at 4.355% to close at 4.41%. Lenders that hadn't already repriced higher by midday did so before the close, pushing the 30-year rate to 6.49% — a 7-basis-point increase on the day.

The driver was straightforward: last Friday's bond rally — built on softer-than-expected jobs data — got unwound at the start of the new week. Risk appetite returned, equity markets steadied, and bond buyers that had aggressively bid on Friday stepped back. With the FOMC in hold mode and no major data on the Monday calendar, there was nothing to interrupt the repositioning. The market didn't need a reason to sell — it needed a reason to stop, and none arrived.

For borrowers, the 7bps move is real money. The 6.42% rate that was on the board Friday afternoon is gone. At 6.49%, a $400K loan is roughly $19/month more expensive than Friday's close. Those who waited through the weekend absorbed the full move. The week's data calendar picks up from here — CPI lands Wednesday and will be the next major test for rates in either direction.

— David Burson, NetRate Mortgage