Bonds closed at the best levels of the week. UMBS 6.0 settled at 99.96, up 61 cents from Wednesday's close, and the 10-year finished at 4.933%, down 8.5 basis points. Lender sheets followed: the 30-year is quoting 7.19%, five basis points below yesterday.

The rally started before the bell and never gave any of it back. Coupons printed 99.66 at 8:06 AM, 99.83 by 10:00, hit the day's best levels around 3:20 PM, and settled at 99.96. What makes the session more convincing than it looked this morning is what happened to oil. The early move was credited to falling energy prices — then oil reversed and climbed more than three dollars between 8:30 AM and 1:00 PM, and bonds went sideways to stronger through the entire stretch. A bid that holds after its stated cause reverses is a real bid, not a correlation.

The data cut against the rally all day as well. Jobless claims came in at 196K against 208K expected — a tight labor print. The Philadelphia Fed business index printed 37.8 versus 30.5 expected, and its prices-paid component jumped to 48.6 from 40.9 the prior month. Three hawkish surprises in one session, and the 10-year still fell more than eight basis points. The softer numbers — housing starts at 1.275M and building permits at 1.394M, both under forecast — were not what moved the curve. What moved it was position unwinding after Wednesday's press conference.

For borrowers, Wednesday's selloff is fully erased and then some: UMBS 6.0 at 99.96 sits roughly a third of a point above where coupons traded before the Fed announcement, and lender sheets have come along, 7.24% down to 7.19%. That is still above the 7.0% range most 2023 and 2024 loans carry, so the refi math has not turned — this is pricing relief on new purchase quotes, not a refinance window. The 10-year settled right on the 4.93%–4.94% technical shelf, with 5.00% now overhead instead of underfoot. The economic calendar is light into next week, and the November Fed meeting is the next scheduled catalyst.

— David Burson, NetRate Mortgage