Member Services Desk Weekly Market Update

This MSD Weekly Market Update reflects information for the week ending July 03, 2026.

Economist Views

THIS WEEK'S ECONOMIC CALENDAR HIGHLIGHTS
Date Time	Event	Period	Survey	Prior
7/6/26 9:45	S&P Global US Services PMI	Jun F	--	51.30
7/6/26 10:00	ISM Services Index	Jun	54.20	54.50
7/7/26 8:15	ADP Weekly Employment Change	20-Jun	--	30.750k
7/8/26 7:00	MBA Mortgage Applications	3-Jul	--	0.00%
7/8/26 14:00	FOMC Meeting Minutes	17-Jun	--	--
7/8/26 15:00	Consumer Credit	May	$19.400b	$20.733b
7/9/26 8:30	Initial Jobless Claims	4-Jul	--	--
7/9/26 8:30	Continuing Claims	27-Jun	--	--
7/9/26 10:00	Existing Home Sales	Jun	4.23m	4.17m
7/9/26 10:00	Existing Home Sales MoM	Jun	1.90%	3.20%

**The Weekly Update will return on July 17.**

Housing reports this past week portrayed a backdrop of mild expansion and subdued price gains. For instance, the S&P Cotality National Price Index rose .84% Y-o-Y in April, while the 20-City index increased by 1.14% Y-o-Y. The Conference Board’s Consumer Confidence report improved slightly in June, as expectations improved likely due to moderation in oil and gas prices. Yet confidence remains historically weak, with consumers anxious about job availability. Given the increase in job openings revealed in the past week’s BLS JOLTS report, the consumer anxiety about jobs is likely due to labor market mismatches. This Thursday morning’s employment situation report, although frequently revised, is considered the tier-1 synopsis of labor market conditions. It revealed a modest increase of 57k jobs vs. the survey estimate of 113k. The unemployment rate dropped to 4.20%. The Mideast quasi-resolution has helped to dial down inflation expectations, at least for now. The situation remains fluid, although parties appear resigned to avoiding lasting flare-ups.

S&P Global PMI: The final-release purchasing managers survey report for June is expected to signal a modest expansion overall. The initial “flash” report released last week reflected that private-sector activity accelerated modestly in June; the composite index posted a 52.2 reading, driven by stronger manufacturing (55.7) while services remained sluggish but positive (51.3).

ISM Services Index: The headline Institute for Supply Management survey index for June is forecast to dip slightly but remain in the above-50 expansion zone. Last month’s report reflected a re-acceleration in activity, driven by strong new orders and business activity, although hiring remained weak and cost pressures elevated. The fresh report is likely to portray similar conditions.

ADP Weekly Employment Change: This dataset has generally been trending sideways yet in positive territory ~30K.

Mortgage Applications: The past week’s headline weekly index registered at unchanged for the week ending June 26th. Purchases were up and refinancings down but both to marginal degrees. With the MBS Current Coupon higher by ~15 bps, as of this mid-week, and the upcoming holiday, it appears unlikely that this barometer will post much of a rebound in the fresh reading.

Consumer Credit: The result for May is expected to downtick from April’s solid figure. Increases in both revolving credit (credit cards) and non‑revolving lending revealed a resilient and willing, at least for the moment and despite a higher rate climate, consumer borrower.

Initial & Continuing Jobless Claims: Initial claims were flat W-o-W, with the 4-week moving average remaining roughly steady at 222.0k. Continuing Claims, meanwhile posted a slight decrease of 7k from the week prior. This dataset has generally been trending sideways, reflecting a steady albeit non-dynamic market and producing minimal reaction in rates.

Existing Home Sales: Last month’s report revealed a somewhat surprising rebound to the strongest level since December, seemingly supported by a deceleration in home-price rises and better buyer demand. The June figures are expected to post another, albeit more modest, M-o-M gain.

Federal Reserve Bank Member Appearances:

• 7/08/2026 14:00 FOMC Meeting Minutes from June meeting to be released and should illuminate opinions within the committee.
• 7/09/2026 09:00 NY Fed President Williams in moderated discussion at "The Future of Market Liquidity and Functioning" Workshop, co-hosted by the NY Fed and University of Chicago.
• 7/09/2026 13:30 Dallas Fed President Logan moderates panel on market liquidity at the above event.

UPCOMING WEEK'S US TREASURY AUCTIONS
Bills	Offering Amount	Auction Date -- Settle Date
4-Week; 8-Week	$85bn; $85bn	7/9 -- 7/14
13-Week; 26-Week	$92bn; $79bn	7/6 -- 7/9
6-Week	$90bn	7/7 -- 7/9
52-Week	$52bn	7/7 -- 7/9
Notes	Offering Amount	Auction Date -- Settle Date
3-Year	$58bn	7/7 -- 7/15
9-Year 10-Month	$39bn	7/8 -- 7/15
Bonds	Offering Amount	Auction Date -- Settle Date
29-Year 10-Month	$22bn	7/9 -- 7/15

 

Key Market Trends

Source: Bloomberg. Top pane is yield (LHS, %); bottom pane is change (LHS, bps). As of Thursday morning, the UST term curve was slightly lower (1 to 3bps) on the short end up to the 2yr point, then higher from 3 to 8bps out to the 10yr point. In terms of Fed pricing, the July 29th meeting prices ~20% chance of a 25-bps hike. The market’s end-2026 Fed Funds forward is ~3.94%, 5 bps lower than a week ago and which equates to ~1.2 25-bps rate hikes for the rest of 2026. A slightly greater chance of hikes is priced into early next year, with the April 2027 forward, at 4.02%, now pricing in a cumulative ~1.6 25-bps hikes. April 2027 represents the near-term peak of rates at 4.02%, last week the peak was a month earlier in March at 4.02%.

Source: Bloomberg. Not to “jinx it” before the holiday weekend, but banking stock indices, as of Wednesday afternoon, were at record highs. Shown here are the BKX (larger banks) and KRX (regional, smaller banks). The sector has clearly improved from the “March Madness-2023” timeframe, with overall improved loan, deposit, and net interest trends over the last few years. Runoff of older lower-yielding securities has also helped both net interest margins and capital as time has passed. And regulatory relief measures are surely playing a role in the higher stock valuations.

Source: Bloomberg. Our short-term advance sector has experienced moderate upward pressure in the past week or so. Short-term investors, such as Money Market Funds, have demanded yield premiums on short-term paper. Indeed, this past Monday’s auction of 3- and 6-month T-bills suffered from notably large tails. With the Fed in potential hiking mode and an expected upswing in net T-bill issuance over the summer months, perhaps investors are taking a more cautious stance. As seen here, the 3- and 6-month Bills spread to SOFR swaps have both widened (basically, the Bill yield went higher relative to SOFR swaps) in the past two weeks. These dynamics have, in turn, sparked a few bps of widening too in our funding spreads and thereby impacted advance rates. As of this writing on Wednesday afternoon, however, these dynamics appeared to be easing somewhat.

Sources: FHLB Office of Finance; FHLBNY. The month of June was a relatively active month for the FHLBNY and the overall FHLB System. As seen here, the System registered a $19.24bn increase in debt outstanding for the month. In the context of the past fifteen years, the increase appears modest, especially when compared to some of the lofty postings of prior years and the $100.2bn of this past April. But the increase is well above the long-term average and median. The long-term chart efficiently illuminates the ability of the FHLB System to expand and contract its balance sheet to in achieve the goal of assisting members and their changing needs.

 

FHLBNY Advance Rates Observations

Front-End Rates

• As of midday Thursday and relative to a week ago, short tenors were 1-3 bps higher than a week ago. Widening in our funding spreads since late last week, partly owing to increased supply and forthcoming net positive T-bill supply, contributed to the week-over-week change. In terms of overall liquidity conditions and SOFR behavior, Fed purchases of T-bills via MBS portfolio principal reinvestments and its Reserve Management Purchases program have continued to grease stability in financing markets and help blunt reactions to any net positive UST and T-bill issuance and/or month and quarter-end periods. Improved dealer intermediation, via lighter regulatory constraints, has also benefited liquidity. Money Market Fund AUM, meanwhile, has instilled funds to the short-end markets. These dynamics have helped to restrain extreme movements in SOFR.
• Net T-bill supply is anticipated to make a pronounced turn into positive territory over the summer. These auction settlements, when net positive, can extract cash from the markets and thereby exert upward pressure on short-end rates. These dynamics have led to some spread-to-SOFR widening in T-bill and our paper. Quarter-end experienced a 6 bp rise in SOFR, although it appears poised to settle back to trend at or below the 3.65% IORB rate.

Term Rates

• The longer-term curve, as of Thursday afternoon and generally mirroring the moves in USTs and swaps, was 2-9 bps higher. Please refer to the previous section for color on market dynamics and changes.
• On the UST term supply front, the upcoming week serves a slate of 3/10/30-year auctions which will each settle on the 15th. Note that UST auctions usually occur at 1pm and can occasionally spur volatility around that time. Please contact the Member Services Desk for further information on market dynamics, rate levels, or products.