Bond markets had been limping back toward slightly stronger territory heading into the afternoon.  (Keep in mind, of course, that's stronger territory compared to the much weaker territory seen earlier this morning.)

Perhaps market participants were hoping for some more acknowledgement of recent turmoil from Yellen than they got.  Yellen explicitly said she still expects the first rate hike to be appropriate some time in 2015, and further went on to justify the stance.  She did this by drawing attention to her views on wage growth. 

That's important because it's one of the key sticking points for those who think the Fed will hold off hiking in 2015.  After a similar 'yeah, I see it' stance on inflation, it was clear that Yellen, indeed, was not missing anything about the big picture.  Perhaps even more important was the fact that these acknowledgements about the big picture didn't sway the broader outlook.

With respect to Greece, anything 'new and different' arrived after markets were closed for the weekend.  Various newswires came out suggesting that Greece was finally at the stage of compromisewith the Eurogroup.  Without boring you with the details, I will say that these headlines did indeed have a different tenor than those seen over the past few months. 

Tsipras was clearly "breaking bad news" to the Greek people, preparing them for the compromises that will be required in this weekend's negotiations in order to remain in the Eurozone.  I don't think there was consensus among market participants that this much apparent progress would be made by today, and that's the reason (one of them) that we've given up so much ground over the past 2 days.  Either way, the reaction on Monday morning could be equally fierce in either direction.


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
99-10 : -0-12
FNMA 3.5
102-23 : -0-10
FNMA 4.0
105-21 : -0-07
Treasuries
2 YR
0.6450 : +0.0600
10 YR
2.4010 : +0.0840
30 YR
3.1920 : +0.0760
Pricing as of 7/10/15 6:43PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
1:21PM  :  ALERT ISSUED: Bond Markets Weaken Further After EU Close; Reprice Risk Outlook Cloudy
9:37AM  :  ALERT ISSUED: Bond Markets Continue Unwinding Greece/China Flight-to-Safety

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Jason York  :  "http://mndne.ws/1LGnsvJ"
Chris Robson  :  "Was effective immediately on release DC"
Dan Clifton  :  "does anyone know when Fannie and Freddie are removing the 30% equity reqirment of a departure residence to count rental income?"
Matthew Graham  :  "RTRS- YELLEN: DOWNWARD PRESSURES ON INFLATION FROM OIL, DOLLAR SEEM TO BE ABATING"
Matthew Graham  :  "RTRS- YELLEN: FIRST RATE HIKE WILL BY ITSELF HAVE ONLY A 'VERY SMALL EFFECT' ON THE LEVEL OF MONETARY ACCOMMODATION"
Matthew Graham  :  "RTRS - YELLEN: ECONOMIC, INFLATION OUTLOOK HIGHLY UNCERTAIN"
Matthew Graham  :  "RTRS- YELLEN: UNANTICIPATED DEVELOPMENTS COULD DELAY OR ACCELERATE THIS FIRST STEP"
Matthew Graham  :  "RTRS- FED'S YELLEN: APPROPRIATE TO BEGIN RAISING RATES 'AT SOME POINT LATER THIS YEAR'"