News

Jinse Finance reported that on December 4, the SOFR options market continued to see a recent trend: traders are focusing on various structured trades for the first two quarters of next year to hedge against multiple rate cuts by the Federal Reserve, and even the possibility of a single 50 basis point rate cut. Fed-dated OIS (Overnight Index Swaps) currently price the effective rate for the June meeting next year at about 3.30%, which is approximately 60 basis points lower than the current effective rate set by the Federal Reserve. The ongoing theme over the past few trading days has been buying upside structures in SOFR options for January, March, and June, aiming to hedge against a greater rate cut premium than what is currently priced in by the swap market.

Jinse Finance reported that Freddie Mac stated on Thursday that the average rate for 30-year fixed mortgages in the United States was 6.19% last week, marking the second consecutive week of decline and reaching the lowest level since the end of October last year. The previous week’s rate was 6.23%, while the average a year ago was 6.69%. Homebuying activity remains sluggish as economic pressures weigh on buyers. However, as rates drop to near 6%, some people have shown greater interest. According to data from the Mortgage Bankers Association, mortgage purchase applications increased by 2.5% for the week ending November 28, reaching the highest level since early 2023. Joel Kan, the association’s deputy chief economist, stated, “Although slower home price growth and increased inventory have brought some buyers back to the market, the overall economic outlook remains uncertain, resulting in mixed weekly outcomes.”