Treasury yields are at their lowest--and MBS at their highest--levels since early June.  For 10yr Treasuries specifically, it wouldn't take more than a few bps of improvement to be at the best levels in 3 months.  Moving out the curve to 30yr Treasuries and we're already there. 

Does this matter?  Not really.  It's just another commentary on the phenomenon of longer maturities performing differently than shorter maturities.  Nothing has changed about that outperformance today.  It's just interesting to note that 30yr yields are at 3 month lows while 2yr yields remain at the highest levels since 2011. 

Longer maturities are more sensitive to long term economic growth and inflation prospects.  Short term maturities are more concerned with monetary policy.  Today's news has arguably benefited both, but with some caveats.

As for the news in question, today is all about China's move to devalue its currency.  It can be looked at from several angles, but few are positive for the global economy.  Chiefly, it's seen as an act of desperation to buoy a struggling Chinese economy.  Some would refer to China as a "global growth engine," whatever that means.  So sure... maybe it's a bad sign that they seem to be pulling out all the stops to avoid a decline in growth. 

In a more practical sense, this is yet another feather in the cap of global currency wars and central bank accommodation.  It certainly could affect the Fed's willingness to hike rates because overly strong domestic currency has its downsides.  Fed funds futures reflected this stance with the likelihood of a December or September hike quickly moving back to its lowest levels in a week.


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
100-30 : +0-18
FNMA 3.5
104-02 : +0-16
FNMA 4.0
106-19 : +0-12
Treasuries
2 YR
0.6690 : -0.0600
10 YR
2.1250 : -0.1073
30 YR
2.7980 : -0.1000
Pricing as of 8/11/15 12:58PMEST

Morning Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
10:42AM  :  China's Surprise Currency Move Boosts Bonds

Live Chat Featured Comments
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Gus Floropoulos  :  "12 months & biz tax return should do it"
Sung Kim  :  "if it is being paid out of the business account, yes"
Scott Valins  :  "Fighting with an uw. Auto leases can be omitted with 12 mos cancelled checks and it being reflected on biz tax returns, correct? I think she's confusing it with trying to omit by paying it off, which I know you can't do."
John Tassios  :  "Someone should, Greenspan has been wrong on quite a bit of predictions and his own policies when he was chairman."
Christopher Stevens  :  "MG calling out Greenspan. Be great if he responded. "
John Tassios  :  "wow MG, nice critique and I agree with you 100% on your commentary. This is a new era, where old failed central bank policies do not work. That is why I have said in the past Bernanke was the right FED chairman at the right time in history to navigate the 2008 crisis. You are now seeing the effects of the US economy faring much better than the rest of the world where their central banks either did nothing, or enacted the old failed policies of the past."
Sung Kim  :  "nothing like a 35 year chart to keep the low rate engine going"
Matthew Graham  :  "
A new 'Day Ahead' has been issued:
The Point Is, You Don't Know"