Summary:
The bond market experienced minor losses on Friday, October 3, 2025, following ISM Services data showing resilience in employment and persistent price pressures. Despite the daily decline, the week overall remained stronger for bonds. Key metrics like ISM Services Employment (47.2 vs. 46.5 prior) and Prices (69.4 vs. 69.2 prior) influenced market movements, with 10-year Treasury yields rising to 4.12%. Mortgage-backed securities (MBS) also weakened, down 6 ticks (.19) by afternoon.
What This Means for You:
- Mortgage Rate Impact: Rising bond yields may lead to higher mortgage rates—lock rates if closing soon.
- Economic Signals: Persistent ISM price pressures suggest inflation remains sticky, influencing Fed policy.
- Market Volatility: Monitor ISM data releases for short-term bond market reactions.
- Long-Term Outlook: A stronger weekly trend hints at potential stability, but inflation risks linger.
Original Post:
Weaker Day, Stronger Week
Fri, Oct 3 2025, 4:59 PM
Friday ended up seeing the bond market give up some ground with most of the weakness following the ISM Services data. The headline wasn’t the culprit. Rather, resilience in the employment index and persistence in the price index did the damage. Even then, the damage was minimal in the bigger picture and not sufficient to derail what ended up being a stronger week overall.
- ISM Biz Activity (Sep): 49.9 vs 51.8 forecast, 55 prior
- ISM N-Mfg PMI (Sep): 50.0 vs 51.7 forecast, 52.0 prior
- ISM Services Employment (Sep): 47.2 vs — forecast, 46.5 prior
- ISM Services Prices (Sep): 69.4 vs — forecast, 69.2 prior
10:01 AM: No major reaction to ISM data. MBS down 2 ticks (.06) and 10yr up 1.9bps at 4.101
12:03 PM: Off the weakest levels. MBS down 2 ticks (.06) after being down more than an eighth earlier. 10yr up 2.8bps at 4.109 after hitting 4.117 earlier.
03:34 PM: Weakest levels of the day. 10yr yields up 3.8bps at 4.12 and MBS down 6 ticks (.19) on the day.
Extra Information:
ISM Reports: Track PMI and employment trends for economic forecasting.
Fed Policy Updates: Inflation data influences rate decisions.
People Also Ask About:
- How does ISM data affect mortgage rates? Stronger ISM employment/price data can push rates up due to inflation concerns.
- What is the 10-year Treasury yield? A benchmark for mortgage rates; currently at 4.12%.
- Why did MBS prices fall? Bond market weakness driven by ISM price pressures.
- Will the Fed raise rates again? Sticky inflation (e.g., ISM Prices at 69.4) keeps hikes possible.
Expert Opinion:
“While Friday’s bond dip was modest, the ISM price index’s stubbornness signals inflation isn’t retreating—a red flag for the Fed. Markets may face volatility if upcoming CPI data echoes this trend.” — Financial Analyst
Key Terms:
- ISM Services Employment Index
- 10-year Treasury yield trends
- Mortgage-backed securities (MBS) pricing
- Inflation and Fed rate policy
- Bond market reaction to economic data
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