• Treasuries were under pressure from a correction in European markets (stocks and bond yields higher) overnight
  • MBS and Treasuries opened noticeably weaker.  MBS ticked painstakingly higher while Treasuries held flat
  • Data was overlooked and end-of-week tradeflows set the tone early
  • In general, it was still a good day for bonds, with closing levels being the 2nd best this week, behind Thursday.

Bond markets hit the 3pm CME close in solid shape on the week with 10yr yields at 1.721 and Fannie 3.0s unchanged on the day at 102-29.  That's roughly a 6bp drop on the week for Treasuries and more than a quarter point gain for MBS.  With those factoids in mind, we can forgive the 10yr note for rising roughly 3bps on the day, especially considering that 1.72 was the low end of our target range for the week.

Oil prices are quickly fading from prominence in terms of bond market motivations as European markets play an  increasingly important role.  Case in point, German Bunds came close to new all-time lows on two occasions this week, and European stocks were unable to break back into last week's higher range.   Stocks are looking very queasy at recent highs, and bond markets are certainly making sure they're in a position to capitalize on the big stock sell-off that may or may not happen.  The resistance levels in this chart from earlier in the week remain unbroken today.  If anything, they've been reinforced.

Domestic stock averages are also looking very queasy.  As stocks continue stalling near 2-month highs, the case continues to grow for the bigger picture, 7-year cyclical shift seen in the chart below from earlier this week.   Meanwhile, bond markets are making sure they're in a position to capitalize on the big stock sell-off that may or may not happen.  

2016-4-7 stocks


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
102-30 : +0-01
Treasuries
10 YR
1.7170 : +0.0280
Pricing as of 4/8/16 4:51PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
10:25AM  :  Bonds Fighting to Go Quietly Into The Weekend

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Hugh W. Page  :  "You're absolutely right MH. Since my bank does not offer the product I'm free to whine about it :)"
Matt Hodges  :  "i'd be real careful making a blanket statement about a program that is legal and a customer asks you about. if you are licensed to originate it and choose not to do so, well..."
Lenny Ujkic  :  "I agree OO. Something doesn't sit right with me. If you want a house you should put some skin in the game unless you were willing to die for this country."
Oliver Orlicki  :  "Never done a DPA loan in my career and dont plan on starting now"
John Tassios  :  "I agree with Hugh, I do not like to use NC HFA either. Rigid UW, higher rates, Very little to no SRP to offer any type of lender credit & higher orig fees, DTI and income restrictions, slow process ,more paperwok. Plus a lot of fine print stipulations must follow for eventual DP forgiveness of gift."
Hugh W. Page  :  "OO Using FL Housing DPA? Don't know. I'd rather take a bullet in the head than do a FL DPA loan honestly."