October 23, 2024
United States:
US Mortgage Activity Gauges Drop to Lowest Levels Since August
US mortgage applications for both home purchases and refinancing dropped last week to the lowest levels since August, hobbled by a recent surge in mortgage rates.
Mortgage Bankers Association’s gauge of home purchases declined 5.1% in the week ended Oct. 18, marking the third straight decrease. The refinancing index retreated another 8.4% last week after slumping by the most since March 2020. The contract rate on a 30-year fixed mortgage held at 6.52%, the data released Wednesday showed. A month ago, the rate stood at a two-year low of 6.13%.
Europe:
European Bonds Rally as Traders Add to Bets on Big ECB Rate Cut
European short-dated bonds rallied as traders added to wagers that the European Central Bank will lower interest rates by half a percentage point in December, in a bid to prop up the bloc’s flagging economy.
The yield on German two-year notes fell as much as eight basis points to 2.10%, erasing its jump since Monday when bond markets suffered a sharp selloff and outperforming UK and US peers. Swaps imply a more-than-40% chance of a half-point reduction at the final ECB meeting of the year, in contrast to last week when only a quarter-point move was envisaged.
Asia:
Global Bond Rout Spreads to Japan With Ultra-Long Debt Pressured
Japan’s bonds are the latest to succumb to a global debt selloff as traders unwind bets for aggressive US interest-rate cuts.
Yields on Japan’s 40-year government debt rose to a 16-year high on Wednesday, a day after their 10-year Treasury peers climbed past 4.2% for the first time since July. The losses have spread to German securities as well as Asian notes, while a gauge of total return in US sovereign bonds is getting closer to erasing its gains for the year.
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