With today's 30yr Treasury auction and slate of corporate issuance, bond markets have worked through much of this week's supply.  Neither had any profound effect on today's trading momentum.  Actually, there really wasn't any trading momentum outside the very smallest of pictures.  Even if we zoom out to, say, a 5-day chart, all we see is consolidation for both Treasuries and MBS.

2015-11-12 recap

So with that consolidation as the backdrop, we can gloss over all of the goings-on that really didn't end up mattering too much.

Stocks, yields, commodities, and the dollar all moved into the afternoon heading lower.  The justifications are spotty, at best.  Weaker equities markets, along with a dip in oil prices definitely helped bonds early.  The afternoon was less-clearly correlated with any events, though a case can be made for 'tradeflows' being the dominant theme.  Reason being: bond markets went one way heading into the 30yr auction, and came out heading the other way.  The catch is that the auction was strong, yet bonds weakened for the rest of the afternoon.  That suggests traders were covering shorts (i.e. buying bonds to book profits on bonds they'd previous sold-short) before and during the 30yr auction, thus leaving an imbalance of sellers a few minutes after the auction.  Short-covering and tradeflow motivations are very much in line with the inconsequential consolidation theme. 

Serving as a backdrop for all of the above was a barrage of Fed speeches.  There were some truly astonishing snippets from Bullard.  You've probably seen these by now if you've read any of my other notes today, but just in case, here are the bullets again:

RTRS - FED'S BULLARD SAYS POSSIBLE U.S. IS ENTERING AN ERA OF PERMANENTLY LOWER INFLATION AND INTEREST RATES

RTRS - BULLARD SAYS STILL PREFERS TO RAISE RATES, WORRIES ABOUT INFLATION, BUT 7 YEARS AT ZERO LOWER BOUND MAY CHALLENGE FUNDAMENTAL ASSUMPTIONS ABOUT U.S. MONETARY POLICY

RTRS - BULLARD - ZERO POLICY RATE AND LOW EXPECTATIONS MAY HAVE ANCHORED INFLATION AT PERMANENTLY LOW LEVELS

RTRS - BULLARD SAYS "REALISTIC POSSIBILITY" THAT INDUSTRIALIZED COUNTRIES COULD FACE RATES STUCK NEAR ZERO

RTRS - BULLARD SAYS LOW INFLATION, LOW RATE ENVIRONMENT COULD INCREASE PRESSURE TO RESORT TO UNCONVENTIONAL MONETARY TOOLS, RISK ASSET VOLATILITY

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
99-22 : +0-01
FNMA 3.5
102-31 : +0-02
FNMA 4.0
105-22 : +0-01
Treasuries
2 YR
0.8790 : +0.0050
10 YR
2.3170 : -0.0194
30 YR
3.0890 : -0.0204
Pricing as of 11/12/15 7:05PMEST
Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
2:24PM  :  ALERT ISSUED: Negative Reprice Risk Increasing for Some Lenders
10:55AM  :  Why Is The Price Up So Much On 10yr Treasuries?
10:04AM  :  Bonds Perking Up on Currency Moves
MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Matthew Graham  :  "RTRS - U.S. SELLS $16 BLN 30-YEAR BONDS AT HIGH YIELD 3.070 PCT, AWARDS 95.55 PCT OF BIDS AT HIGH"
Matthew Graham  :  "Auction preview. the 1pm "when-issued' yield was at 3.085"
Andy Pada, Jr.  :  "in NJ purchases, the purchaser's attorney used to be the settlement agent. now attorneys won't take on the potential liability of being the settlement agent which means that the borrower pays his/her attorney AND a settlement agent from the title company."
Ted Rood  :  "undoubtedly"
Andy Pada, Jr.  :  "is it me, or does TRID costing the consumer more?"
Ted Rood  :  ""won't address Fed's virtual certainty to raise rates at Dec meeting"?"
Matthew Graham  :  "RTRS - FED'S DUDLEY: CONDITIONS FOR FOMC TO BEGIN TO NORMALIZE MONETARY POLICY "COULD SOON BE SATISFIED""
Matthew Graham  :  "RTRS - FED'S DUDLEY SAYS IN PREPARED REMARKS WILL NOT ADDRESS WHETHER TIGHTENING CYCLE WILL BEGIN IN DEC FED MEETING"
Matthew Graham  :  "RTRS - FED'S DUDLEY EXPECTS GRADUAL RECOVERY IN HOUSING SECTOR TO CONTINUE, FUNDAMENTALS ARE SOLID"