It's been an interesting week so far with trade war developments taking bonds in an unexpected direction unexpectedly quickly and MBS underperforming the rally more than we'd like to see.  Trade war headlines have provided a nearly constant supply of volatility for bond stocks and bonds, and today was no exception.

Late day campaign rally comments from Trump started the ball rolling overnight with more stock losses and bond market gains.  Then early this afternoon, Trump's comments about receiving a letter from Xi were much more upbeat.  They single-handedly turned accounted for the afternoon gains in stocks and losses in bonds. Nonetheless, bonds ended the day with gains.  10yr yields were 3bps lower and Fannie 3.5 coupons managed to hold on to 2 ticks of strength (0.06 points).  

All of the above is well and good, but for several days, it's been tomorrow that serves as the deadline for any sort real news regarding a trade deal.  It's not that we necessarily should expect any concrete resolution to negotiations, but there could be an announcement that marks a meaningful shift in tone, for better or worse.