The headline is the recap.  There's not much more to it than that.  Ever since China stepped in to stem the tide of currency weakness yesterday afternoon, bond markets have been selling-off.  It was good while it lasted, but as far as surprisingly potent market-movers go, this particular iteration of this particular market mover has run its course.

If we want to stretch the boundaries of correlation and causality, we could discuss the fact that Retail Sales numbers were slightly stronger than expected this morning and that the previous month of data was revised better by a less-than-insignificant amount.  But in reality, there just wasn't much market movement surrounding this morning's data. 

The better place to look for supporting actors in today's drama would be the corporate bond market.  Once again, new issuance was on the high side, with more than $8bln hitting the street today.  When added to the $16bln in Treasury issuance, bond markets had plenty of supply to take down.  It's not unfair to assume that the abundance of supply has something to do with the weakness.  The case for that gets even stronger when you consider that stocks didn't make the same sort of gains they did yesterday during the initial response to China's change of heart (in fact, they were slightly weaker).

This bounce back is big enough to threaten the recently positive trend and small enough for us to hold out some hope that it's not yet over.  Given the fundamentals underlying the price movement, selling seems like a bigger risk at the moment.  In other words, if China was what helped rates pop lower, and now the China situation changed in such a way for rates to pop back higher, where's the incentive for rates to resume the trend lower? 


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
100-10 : -0-08
FNMA 3.5
103-16 : -0-07
FNMA 4.0
106-04 : -0-06
Treasuries
2 YR
0.7090 : +0.0400
10 YR
2.1890 : +0.0410
30 YR
2.8570 : +0.0190
Pricing as of 8/13/15 6:46PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
12:42PM  :  ALERT ISSUED: Negative Reprices Now More Likely
12:18PM  :  ALERT ISSUED: On The Edge of Negative Reprice Risk For Some Lenders
8:53AM  :  Under Pressure Again After Decent Data

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Matthew Graham  :  "'refunding' = new. 'reopening' = also technically new, but just opening a previously issued coupon back up to more investment dollars. "
Matthew Graham  :  "and indirects remaining healthy: - PRIMARY DEALERS TAKE 38.19 PCT OF U.S. 30-YEAR BONDS SALE, DIRECT 9.92 PCT AND INDIRECT 51.88 PCT"
Matthew Graham  :  "points given for bid-to-cover staying in range: RTRS- U.S. 30-YEAR BOND BID-TO-COVER RATIO 2.26, NON-COMP BIDS $5.77 MLN"
Matthew Graham  :  "swing and a miss"
Matthew Graham  :  "RTRS- U.S. SELLS $16 BLN 30-YEAR BONDS AT HIGH YIELD 2.880 PCT, AWARDS 71.47 PCT OF BIDS AT HIGH"
Sung Kim  :  "remind me, refunding is new issuance right? or is that rolling their current debt"
Matthew Graham  :  "bid to cover has been 2.18-2.54 recently, but favoring the lower range for 'refunding' auctions (which today's is)."
Sung Kim  :  "freaky"
Matthew Graham  :  "30yr expectations at 2.859"
Sung Kim  :  "any yield below 2.859 with high bidding"