To many, Greece is the boy who cried wolf when it comes to negotiating reforms in exchange for aid from its Eurozone creditors. So when the week began with those creditors laying out (and Greece agreeing to) a timeline to move forward with the negotiations, many market participants were skeptical. After all, the timeline involved several steps that had previously resulted in delays or outright failures from Greece. Why should this time be any different?
But so far, it's been different. Whereas it might have been a longshot for Europe and Greece to make it to the negotiating table this weekend, it's become much more of a reality over the past two days. With reports of several Greek political parties voting to accept the proposed reforms, Greece will be heading into this weekend's EU summit with live ammo. Plenty of skepticism remains, but the fact that there's a legitimate chance of a deal this weekend is worth a good chunk of bond market negativity.
Yellen added to it at noon, saying that the lack of wage growth was in line with her views on labor market slack, but that she still sees the Fed hiking rates once in 2015. Fed Funds Futures moved quickly back toward a more equivocal stance between January and December as the most likely month for lift-off. Two days ago, January had a clear lead.
All told, MBS are down about 3/8ths of a point and 10yr yields are up 9bps to 2.406. There isn't anything special left on the calendar for today, but still plenty of time for headlines out of Europe.
MBS | FNMA 3.0 99-10 : -0-12 | FNMA 3.5 102-22 : -0-10 | FNMA 4.0 105-21 : -0-07 |
Treasuries | 2 YR 0.6530 : +0.0680 | 10 YR 2.4060 : +0.0890 | 30 YR 3.1920 : +0.0760 |
Pricing as of 7/10/15 1:41PMEST |