• Momentum was weaker into the morning
  • European bond gains helped Treasuries hold under supportive ceiling
  • Stocks kept arguing for bond weakness, but Europe and Treasury Auction turned the tide

Things were tense for the entirety of the AM hours today as 10yr yields bounced near a technical ceiling of 1.80 incessantly.  Most of that bouncing occurred before domestic trading began for the day, but there were at least three more solid attempts before 11am.

Heading into the 11am hour, stocks broke their own short term ceiling.  That would normally be a concern for bond markets--especially when stocks are potentially breaking the parabolic ceiling in the following chart--but European bond markets were already leading Treasuries back toward lower yields (that time of day is still active in Europe due to end-of-day trading).  

2016-4-13 Stocks

A stellar 10yr Treasury auction only confirmed bond markets' defiance of the stock gains.  10s ended the day only 1bp lower, but that was more than 3bps lower from the highs.  Fannie 3.0s picked up 3 ticks and several lenders repriced positively in the afternoon.

You'll notice I ignored economic data, as did financial markets.  This is very telling considering Retail Sales is typically a market mover.  To be fair, the weak Sales data did temporarily help bonds, but they were back at the weakest levels in less than 90 minutes.


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
102-20 : +0-02
Treasuries
10 YR
1.7660 : -0.0150
Pricing as of 4/13/16 5:22PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
1:11PM  :  Auction Confirms 10yr Notes a "Buy" at 1.80
12:59PM  :  Briefly Back in Positive Territory; Auction Preview
9:33AM  :  ALERT ISSUED: Reprice Risk for One or Two Lenders With Unlucky Timing
8:37AM  :  First Move is Stronger After Bond-Friendly Econ Data, But...

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
John Tassios  :  "Just logged on, been waiting many months for MG to assign a A+ to 10 year auction.:)"
Nathan Miller  :  "yeah DS we got hit .5pt on 30yr conf today too"
Dmitry Shamis  :  "odd... went to lock a loan with Flag... pricing changed by .5 from yesterday into today... Anyone else see anything similar?"
John Sheadel  :  "Come on reprices... no whammies... no whammies... no whammies..."
Ted Rood  :  "NICE"
Matthew Graham  :  "it's the best auction on record that I can see, in terms of beating the 1pm when-issued yield"
Matt Hodges  :  "you never give A+"
Matthew Graham  :  "A+"
Matthew Graham  :  "RTRS - HIGH YIELD AT LATEST 9-YR 10-MO NOTE SALE WAS MORE THAN 1 BASIS POINT BELOW ITS 1 P.M. WHEN-ISSUED LEVEL - REUTERS DATA"
Matthew Graham  :  "RTRS - U.S. 9-YR 10-MO NOTES BID-TO-COVER RATIO 2.75, NON-COMP BIDS $7.64 MLN"
Matthew Graham  :  "RTRS - U.S. SELLS $20 BLN 9-YR 10-MO NOTES AT HIGH YIELD 1.765 PCT, AWARDS 98.52 PCT OF BIDS AT HIGH"