The headline is the recap today.  If an hour of the day ended with an "AM," it was good for bond markets today.  The only exception would be the midnight-2am time frame.  So the rallying hours were really 2am through Noon eastern, and therein lies the clue as to the source of the strength.

2am-Noon Eastern coincides with most the European market hours, and Europe clearly provided the fuel for today's bond market rally.  German Bunds had a mind-bending rally today, moving from highs of .61 to lows of .53.  If that doesn't sound like a lot, consider that US Treasuries only managed a little better than HALF that pace over the same time frame in terms of price.  Or simply consider that Bunds (these are Europe's benchmark 10yr notes, by the way) ended their day 5bps lower and US 10yr Treasuries are heading out the door half a bp higher!

Domestic bond markets were in position to extend the rally in the event that the ISM data was weaker than expected.  As we've discussed recently, the risk of additional gains in bond markets is trickier to prepare for than the risk of a bounce back toward higher yields.  As such, traders wanted to be at the best levels of the day at 10am.  When the data came out just slightly below forecast, it wasn't enough to push the snowball down the hill, so bonds ebbed back toward unchanged levels and enjoyed a mostly quiet afternoon from there on out.


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
101-15 : +0-01
FNMA 3.5
104-13 : +0-01
FNMA 4.0
106-23 : +0-00
Treasuries
2 YR
0.6490 : +0.0200
10 YR
2.0400 : +0.0050
30 YR
2.8530 : -0.0010
Pricing as of 10/1/15 4:39PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
2:11PM  :  ALERT ISSUED: Negative Reprice Risk Becoming a Consideration
10:17AM  :  10am Data Punctuates Europe-Driven Rally. Something Else Happening Now?

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Timothy Baron  :  "I'm locking in recent gains ahead of tomorrow's NFP."
Steve Chizmadia  :  "Locked 3 yesterday, 3 today. My hunch tells me tomorrow is good for us, but my clients and I discussed risk of the looming report and all decided to take risk off the table. Still hope we rally like crazy tomorrow. "
Matt Hodges  :  "it's relatively quiet right now and it's the first day of October, kicking off Cancer Awareness Month. My stepmother's sister, my Mom, my Sister and my Wife are all BC survivors. If you are a woman, think about your *** health. If you have a woman in your life encourage her to do monthly exams, schedule Mammograms or MRIs as appropriate. Thanks for allowing the PSA, MG."
Doug Seder  :  "CS, SV and JY, thank you for your help on the loan this morning, borrower is applying with me. Your input and support was invaluable in helping to win this loan !!"
John McClellan  :  "Property address is one of the "app" triggers"
John McClellan  :  "that is correct TR"
Ted Rood  :  "We're being told we can run DU on a TBD purchase, but unless you have a specific property address, am 99% sure you can't create a formal TRID application."
Clayton Sandy  :  "are you guys changing your process in regards to a pre-approval versus a pre-qual with TRID?"