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Morning Report: Global sovereign yields continue to climb


Vital Statistics:

Global sovereign bond yield continue there relentless march higher, with the 10 year approaching 4.9% in the overnight session. We are seeing a bit of a reprieve this morning after the weak ADP print.

The bond sell-off is global, with the Japanese Government Bond yield breaking through 0.8% and the German Bund touching 3%.

The economy added 89,000 jobs in September, according to the ADP Employment Report. “We are seeing a steepening decline in jobs this month,” said Nela Richardson, chief economist ADP. “Additionally, we are seeing a steady decline in wages in the past 12 months.” Interestingly, we saw a decrease in professional / business services, which saw the biggest increase in job openings in yesterday’s JOLTS report. Pay growth for job stayers decelerated to 5.9% while pay growth for job changers decelerated to 9%.

Mortgage applications fell 6% last week as purchases fell 5.7% and refis fell 6.6%. The applications index hit the lowest level since 1996. “Mortgage rates continued to move higher last week as markets digested the recent upswing in Treasury yields. Rates for all mortgage products increased, with the 30-year fixed mortgage rate increasing for the fourth consecutive week to 7.53 percent – the highest rate since 2000,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “As a result, mortgage applications grounded to a halt, dropping to the lowest level since 1996. The purchase market slowed to the lowest level of activity since 1995, as the rapid rise in rates pushed an increasing number of potential homebuyers out of the market. ARM loan applications picked up over the week and the ARM share increased to 8 percent, as some borrowers searched for ways to lower their payments.”

Atlanta Fed President Raphael Bostic sees only one rate cut in 2024. “I am not in a hurry to raise, but I am not in a hurry to reduce either,” Bostic said Tuesday at an event in Atlanta, referring to the US central bank’s benchmark interest rate. “I want us to hold. I think that’s the appropriate thing to do, for a long time.” He has been one of the more dovish Fed Presidents.

A last-minute bipartisan budget agreement was reached over the weekend, which kept the Federal Government and the National Flood Insurance Program (NFIP) operating for another 45 days into mid-November.  While the NFIP has measures which prevent a true lapse in the case of a government shutdown, it is smart for lenders to understand how to address flood insurance in case a shutdown occurs. A lender can place the insurance application in the borrower’s file as proof and move forward with closing. Alternatively, lenders can purchase WYO of Private Flood Insurance. Pinnacle Property Data is a boutique vendor management company that specializes in flood certifications and offers flood certifications from ServiceLink National Flood. They work with many of the largest lenders in the industry to reduce costs on flood certifications and provide unique value add products for free. Pro tip: Have your loan officers get flood insurance requirement data for free and if flood insurance is required, get an instant quote here . Now is the time to look at process improvements and efficiencies! Contact us today to see how we can save you money on your flood certification program! 602-561-6791 or

The services economy expanded in September, albeit at a slower rate, according to the ISM Services Index. There has been a slight pullback in the rate of growth for the services sector, which is attributed to slower rates of growth in the New Orders and Employment indexes. The majority of respondents remain positive about business conditions; moreover, some respondents indicated concern about potential headwinds.” Employment growth decelerated, while pricing was flat on a month-over-month basis.

ADP: Private Employment Increased 89,000 in September

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