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Market Analysis 10.23.25: Trading Has Been Choppy

Good Thursday morning from your Hometown Lender,

Rates are off a bit today as trading has been choppy.

It is likely due to the additional sanctions on Russian Oil pushing oil prices higher (think higher inflation). It is never a straight line up or down. It is unlikely we see any big moves in bonds today, ahead of tomorrow’s CPI inflation data (comes out at 8:30am ET). This will be the first piece of economic data released since the government shutdown, and only because analysis is required to calculate the social security cost of living increase. There are questions on how accurate the data will be since the analysis is labor-intensive and mostly done in-person through three 10-day periods throughout the month.

From a higher view:

What moved rates today (analysis) (10/23)

  • Housing beat (the good kind): Existing-home sales rose 1.5% in September to 4.06M SAAR, the fastest pace since February. Inventory was up ~14% y/y and the median price rose 2.1% y/y to $415,200. That’s a “more supply, still-firm prices” combo that markets read as steady—not overheated. Reuters+2AP News+2
  • Oil spike (the not-so-good kind for bonds): Crude jumped ~5% to ~$61–62 after the U.S. sanctioned Rosneft and Lukoil. Higher oil can lift near-term inflation expectations and nudge yields up if the pop sticks. Reuters+2U.S. Department of the Treasury+2
  • Treasury yields: The 10-year hovered ~3.98–4.00% intraday—still inside the recent sub-4% neighborhood but with a mild upward bias as oil rallied. MarketWatch+1
  • Mortgage backbone (MBS): Recent prints show UMBS 5.5% ~101-09 to 101-11 earlier this week—supportive but vulnerable to an oil-led wobble. Lenders stayed close to prior sheets into the housing release. Mortgage News Daily
  • Shutdown overhang, Day 23: Senate leaders floated measures to pay some federal workers during the impasse. Shutdowns usually add a small growth drag (a tailwind for bonds), but today’s oil shock diluted that help. CBS News

Where retail mortgage rates sit

  • Freddie Mac PMMS (last week, 10/16): 30-yr avg ~6.27%; new weekly print hits today, but remember PMMS lags daily pricing. (Your live sheets will track the 10-yr/MBS more closely.) Freddie Mac+1

The rest of this week & next (date-stamped catalysts)

  • Today (Thu, Oct 23): Existing-home sales released at 10:00 a.m. ET (see above). NAR
  • Fri, Oct 24: U. Mich. final sentiment (10:00 a.m. ET)—soft but steady is the base case. ISR SCA
  • Tue–Wed, Oct 28–29: FOMC meeting—markets lean to a 25 bp cut; the statement and presser matter more than the move. Federal Reserve+1
  • Thu, Oct 30: Q3 GDP (advance, 8:30 a.m. ET)—a big swing factor for yields. Bureau of Economic Analysis
  • Fri, Oct 31: PCE (Sep, 8:30 a.m. ET)—the Fed’s favorite inflation gauge. Bureau of Economic Analysis
  • Wed, Oct 29: Pending Home Sales (Sep)—a forward look for closings into the holidays. NAR

How to explain today’s analysis to a novice client

  • Mortgage rates follow the 10-year: When investors worry about growth or see cooling inflation, they buy bonds → yields down → mortgage pricing can improve. Today’s wrinkle is oil up on sanctions, which can push yields higher if it persists. Net: a tug-of-war between housing stability and energy-driven inflation risk. Reuters+1

Near-term rate scenarios & analysis (next 1–3 weeks)

  1. Sideways with a gentle dovish lean (still possible): Oil cools back, GDP/PCE come in tame, shutdown lingers → 10-yr ~3.85–4.05%; retail 30-yr fixed flat to slightly better. Bureau of Economic Analysis
  2. Oil-sticky + firm data (today’s risk case): Sanctions keep crude elevated and GDP/PCE firm → 10-yr 4.05–4.25%, rate sheets worsen a bit. Reuters
  3. Risk-off jolt: Shutdown drama or weak data → 10-yr 3.70–3.85%, pricing improves—but expect whipsaws around the Fed and month-end. (Inference using current correlations and event path.) Federal Reserve

Practical lock/float analysis

  • Closing ≤30 days: Light lock bias. You’re trading modest upside for protection from oil headlines + FOMC + GDP/PCE.
  • 45–90 days out: Float with guardrails. Pre-set a trigger: lock on a decisive 10-yr break above ~4.10% or if UMBS 5.5% slips meaningfully below recent ~101-08/11 support. MarketWatch+1
  • Points vs. no-points: In a mostly sideways tape, point breakevens often create more savings than chasing tiny rate moves—price both coupons and document the breakeven for clients.

Quick, copy-ready talking points

  • “Next up: FOMC (Oct 28–29), GDP (Oct 30), PCE (Oct 31)—that trio sets the tone into November.” Federal Reserve+2Bureau of Economic Analysis+2
  • “Sep existing-home sales up to 4.06M—inventory improving, prices still firm.” AP News
  • “Oil popped ~5% on Russia sanctions; if sustained, that can lean yields higher.” Reuters
  • “The 10-yr is hovering near 4%; mortgage pricing remains range-bound but headline-sensitive.” MarketWatch

Stay safe and make today great!