You'll notice an ongoing theme over the past few weeks as we talk about the selling pressure in bond markets, and that is that this sell-off should be taken seriously until/unless it's definitively defeated.  We've already pointed out that the correction in German Bunds is bigger than any other example in nearly 2 years.  And in terms of the amount of ground covered in a 2 week period, it's the biggest Bund sell-off in at least 10 years.  In other words, it's big deal, and something serious is certainly happening.

It's the kind of move where you assume it's "the big one," batten down the hatches, and wait for the storm to pass.  After it looks like the storm has passed, you'd still want to wait a bit longer to make sure it wasn't merely the eye of the storm.

We were subjected to another sobering dose of seriousness this morning after weaker-than-expected ADP numbers failed to provide any meaningful relief in the ongoing rout.  Bunds rose a full 10bps from .51 to .61, which translated to a mere 6bp rise in Treasuries and an even more tolerable 6 tick drop in MBS prices.  Though tolerable from a relative standpoint, the MBS weakness has still been more than enough to prompt multiple negative reprices.


MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.
MBS
FNMA 3.0
100-23 : -0-06
FNMA 3.5
104-02 : -0-03
FNMA 4.0
106-18 : -0-01
Treasuries
2 YR
0.6350 : +0.0080
10 YR
2.2380 : +0.0560
30 YR
2.9820 : +0.0740
Pricing as of 5/6/15 1:37PMEST

Morning Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
12:27PM  :  ALERT ISSUED: If You Haven't Seen A Reprice Yet, You Probably Will
11:00AM  :  ALERT ISSUED: Negative Reprices Slightly More Possible
10:28AM  :  ALERT ISSUED: Once Again, Early Reprice Risk Considerations / Heads-Up
8:53AM  :  Recovering From Weaker Overnight Levels After ADP

Live Chat Featured Comments
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Mike Tavani  :  "I agree, the educational value of this site is second to none. I've been spreading the love."
Frank Hanna  :  "Love mbslive"
Mike Tavani  :  "http://mndne.ws/1asYZn2"
Jason Anker  :  "it is. irs site"
Frank Hanna  :  "Link? Is it immediate?"
Jason Anker  :  "they can do that online"
Frank Hanna  :  "Can a client call and get tax transcripts faxed immediately? 4506 is takin too long. "
Ira Selwin  :  "Gm - Rough start even with positive mbs news - we'll see how this plays out Thur/Fri"
Matthew Graham  :  "RTRS- MOODY'S ANALYTICS ECONOMIST MARK ZANDI SAYS DROP IN ADP PRIVATE PAYROLLS LARGELY DUE TO WEAK ENERGY PRICES, STRONG DOLLAR - CNBC"
Adam Dahill  :  "Looks like traders are waiting for the main event. "
Matthew Graham  :  "this shallow of a bounce is bad news "
Oliver Orlicki  :  "still selling off"
Matthew Graham  :  "RTRS - REUTERS CONSENSUS FORECAST FOR ADP PAYROLL CHANGE FOR APRIL WAS FOR INCREASE OF 200,000 JOBS"
Matthew Graham  :  "RTRS- ADP NATIONAL EMPLOYMENT REPORT SHOWS U.S. EMPLOYMENT INCREASED BY 169,000 PRIVATE SECTOR JOBS IN APRIL"