Here it is the end of Monday and markets are still stuck on the same old thoughts and strategies that existed last week even before the NFP release.  At the time, traders were feeling like the bond rally had already shown perplexing staying power and that there was a high bar for NFP to help extend the rally.  In other words, traders were leaning toward cashing in the recent gains or looking for an entry point to bet on rates moving higher.

Friday at 10am marked that moment and nothing else important or interesting has happened since (relatively). 

The fact that traders are tuned out from economic data and other calendar events is evident in the extent to which bonds and stocks are following each other.

2015-10-5 lever

If today's ISM Non-Manufacturing data was able to come out as weak as it did without stocks or bonds even noticing, and when stocks and bonds are trading with this much correlation, something else is going on.  At the risk of using market cliches that I normally make fun of, stocks were oversold and bonds were overbought--even if only temporarily.  Today's movement looks like a classic reaction to an overbought/oversold condition (that's why I make fun of these terms because they really only work in hindsight--like most predictive analysis).


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
101-17 : -0-07
FNMA 3.5
104-14 : -0-05
FNMA 4.0
106-24 : -0-03
Treasuries
2 YR
0.6090 : +0.0276
10 YR
2.0580 : +0.0669
30 YR
2.8990 : +0.0754
Pricing as of 10/5/15 5:06PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
2:42PM  :  ALERT ISSUED: Negative Reprice Risk Now a Consideration
1:18PM  :  ALERT ISSUED: Heads-Up: Probably Time To Get Ready For Reprice Risk
10:27AM  :  Slightly Weaker Overnight; ISM Data Not Much Help

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Sung Kim  :  "here is the PDF KD, much easier to use than allregs - http://portal.hud.gov/hudportal/documents/huddoc?id=40001HSGH.pdf"
Kevin Danforth  :  "anyone else not able to access HUD handbook through allregs currently?"
Matt Hodges  :  "looks like CH conf about .125 better; jumbo unchanged"
Scott Valins  :  "crazy that we are back at preNFP level on 10 year"
Bill Hills  :  "Chase non-agency pricing is always erratic. I usually float into 15-day pricing with much success. Their current behavior, however, is scaring me."
Sung Kim  :  "u think pricing is worse now, just wait until you start seeing the turn times.."
Doug Seder  :  "The Chase re-price on Friday afternoon was a big hit to the non-conforming pricing, I was thinking pipeline controll"
Megan Sfara  :  "I was just going to ask about Chase too. Mine is a lot worse"
Bryce Schetselaar  :  "how is Chase pricing out compared to Friday? My pricing is quite a bit worse"