• Bonds weaker WAY before Fed Minutes
  • Oil, stocks and European bonds hurt Treasuries overnight
  • Oil kept pressure on with 10:30am inventory data 
  • Bonds found their own reasons to weaken heading into FOMC
  • Bonds finally bounced after FOMC was seen as non-issue, but closed weaker on the day

Bond markets did their best to hold ground at several defensive levels today, but gradually gave up most of yesterday's gains.  In that sense (holding the gains seen through Monday), today was a victory.  In every other sense, today was a bit of a bummer.

The weakness began in the overnight session with stocks and oil prices surging out of the gate and continued with European bond markets selling-off fairly quickly.  Treasury yields were pulled higher on both accounts and MBS began the day roughly an eighth of a point weaker.  

From there, bonds staged a modest comeback heading into the 1030am oil inventory data, but were never able to break back into positive territory.  When the inventory data sent oil and stocks higher, bonds followed, ultimately finding support with 10yr yields hitting 1.774 at 1:22pm, nearly 40 minutes before the FOMC Minutes.  

The Minutes came out without any high drama.  It turns out most of the committee is in tune with Yellen on staying more cautious in the current global economic environment and there are only 2 members who heartily disagreed.  Bonds seemed to take some solace in that at first, but leveled off without ever attempting to stage a bigger comeback.  By 3pm, 10yr yields were ust under 1.76 and Fannie 3.0s were down an eighth of a point on the day.

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 : -0-06
Treasuries
10 YR
1.7550 : +0.0280
Pricing as of 4/6/16 4:57PMEST
Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
2:13PM  :  Fed Minutes More in Line With Yellen; Bonds Holding Ground
1:10PM  :  ALERT ISSUED: Negative Reprice Risk Increasing For More Lenders
11:56AM  :  ALERT ISSUED: Early Heads Up on Potential Reprice Risk
11:30AM  :  On The Edge of Riskier Territory Unless Bonds Bounce Here
10:06AM  :  Fighting to Hold Ground After Modest Overnight Weakness
MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Victor Burek  :  "seems pretty much in line with what yellen said the other day"
Jason Anker  :  "looks like we have a fight brewing"
Matthew Graham  :  "RTRS- SOME POLICYMAKERS SAW FIRMING TREND IN INFLATION, OTHERS VIEWED INCREASE AS UNLIKELY TO BE SUSTAINED"
Matthew Graham  :  "RTRS - MANY POLICYMAKERS NOTED FED HAD LITTLE ROOM TO EASE MONETARY POLICY IF ECONOMIC ACTIVITY OR INFLATION WEAKENED, WHILE TWO FEARED TOO GRADUAL A TIGHTENING COULD RESULT IN NEED TO RAISE RATES QUICKLY LATER (surprise surprise?)"
Matthew Graham  :  "RTRS- SEVERAL POLICYMAKERS ARGUED FOR CAUTION, CITING RISKS TO U.S. ECONOMY FROM ABROAD AND CONCERNS LONGER-RUN INFLATION EXPECTATIONS SLIPPING LOWER"
Matthew Graham  :  "RTRS - TWO FED POLICYMAKERS SAW IT APPROPRIATE TO RAISE FED FUNDS RATE TO 0.5-0.75 PCT AT MARCH MEETING CITING U.S. ECONOMIC STRENGTH DESPITE DEVELOPMENTS ABROAD AND EARLIER MARKET VOLATILITY"
Matthew Graham  :  "RTRS - SEVERAL POLICYMAKERS SAID GLOBAL DISINFLATIONARY PRESSURES, POSSIBLE LOWER INFLATION EXPECTATIONS POSED DOWNSIDE RISKS TO INFLATION OUTLOOK, A FEW OTHERS SAID OVERLY TIGHT RESOURCE UTILIZATION COULD PUSH INFLATION ABOVE TARGET"
Matthew Graham  :  "RTRS- SOME POLICYMAKERS INDICATED AN INCREASE IN APRIL MIGHT BE WARRANTED IF DATA REMAINED CONSISTENT WITH GROWTH, JOBS AND INFLATION GOALS WHILE OTHERS JUDGED HEADWINDS WOULD SUBSIDE ONLY SLOWLY"
Matthew Graham  :  "RTRS- SEVERAL POLICYMAKERS SAID HIKING RATES IN APRIL WOULD SIGNAL SENSE OF URGENCY THAT WAS NOT APPROPRIATE"
Matthew Graham  :  "RTRS - MANY POLICYMAKERS SAID GLOBAL ECONOMIC AND FINANCIAL SITUATION STILL POSED APPRECIABLE DOWNSIDE RISKS TO U.S. ECONOMIC OUTLOOK; A FEW SAID ACTION BY OTHER CENTRAL BANKS HAD MITIGATED RISKS TO GLOBAL OUTLOOK"
Matthew Graham  :  "RTRS- FED POLICYMAKERS EXPRESSED "RANGE OF VIEWS" AT MARCH MEETING ON LIKELIHOOD OF RAISING FED FUNDS RATE IN APRIL - MEETING MINUTE"
Steve Chizmadia  :  "I think they worsened by something like .7 shortly after the am rate sheet came out"
Steve Chizmadia  :  "Most of the community thinks someone in Chase's secondary made a mistake, caught it and pulled back pricing shortly thereafter"
John McClellan  :  "love Chase ...quoted a jumbo at 10 am...par pricing ...sold to the borrower...went to lock...cost of 5k..this was yesterday...ouch"