Bonds finished the week slightly weaker but well off the afternoon lows. The 30-year closed at 6.71%, up 2 basis points on the day and down 3 on the week, with the 10-year Treasury at 4.693%.

The day had two halves. Bonds opened holding Thursday's gains, sold steadily after the 8:30 AM ET data, and bottomed around 1:30 PM ET with UMBS 5.5 at 99.31 — roughly six ticks below where lenders printed morning rate sheets, which is the setup that puts negative reprices in play. Then it stabilized. UMBS 5.5 recovered eight ticks into the close to finish 99.39, down 22 basis points on the day, and the 10-year settled at 4.6927%, up 4.95 basis points from Thursday's 4.643%.

What's worth understanding is why weak data produced higher rates. July Retail Sales came in at -0.6% against a +0.1% estimate, and preliminary August consumer sentiment printed 51.0 against a 54.5 forecast — two clear misses. Bonds sold anyway, because most of the retail decline traced to Amazon Prime Day calendar timing and a seasonally distorted drop in fuel sales. Net of both, traders read the report as decent rather than weak, and yields drifted back to midweek highs. MBS held up better than Treasuries through all of it, and lenders had never fully passed through Thursday's rally to begin with — which is why a 5 basis point move in the 10-year showed up on rate sheets as two hundredths of a percent.

For borrowers, the week still finished better than it started. The 30-year closed Monday at 6.76% and ends at 6.71%, and apart from Thursday afternoon, today is the lowest level since July 17. Next week has more on it than the calendar suggests: Building Permits and Housing Starts Tuesday, August 18, **FOMC minutes Wednesday the 19th at 2:00 PM ET** — the only first-tier item on the week — jobless claims Thursday the 20th, and PCE on Friday, August 28 as the next inflation reading that carries weight. The September Fed meeting is still the event underneath all of it.

— David Burson, NetRate Mortgage