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MBS RECAP: Bonds Quickly Reverse The Curse Thanks to Trade Headlines

By: Matthew Graham
Posted Tue, Dec 3 2019, 5:36 PM

One short day after sending somewhat alarming signals about a move back up toward the top of the recent range, the bond market bounced back with a vengeance.  What else could cause such an unexpected move but an unexpected development in the US/China trade war saga?  

Today's version was pretty simple.  In the wee hours of the morning, Trump was quoted as saying it might not make sense to finalize the trade deal until after the November 2020 election.  Stock prices and bond yields dropped quickly before leveling off as the domestic session began.  

Equities futures resumed the selling spree as soon as US traders were firing on all cylinders and bond yields weren't far behind.  Additional Trump comments (that alluded to the risk of European trade wars) kept the good times rolling for rates, ultimately pushing 10yr yields briefly under 1.70%.  Fannie 3.0 MBS are more than 3/8ths of a point higher at their best levels, but gains ebbed in the afternoon.  They ended 6 ticks higher (.19) at 101-17 (101.53).

MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.
FNMA 3.0
101-17 : +0-07
10 YR
1.7170 : -0.1190
Pricing as of 12/3/19 5:35PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
4:33PM  :  ALERT ISSUED: Heads Up: A Few Negative Reprices Reported
9:55AM  :  Bonds Keep Rallying (Stocks Sliding) as Trump Talks Taxes

Economic Calendar
Time Event Period Actual Forecast Prior
Wednesday, Dec 04
7:00 Mortgage Refinance Index w/e 2282.2
8:15 ADP National Employment (k)* Nov 140 125
10:00 ISM N-Mfg Bus Act * Nov 56.1 57.0
10:00 ISM N-Mfg PMI * Nov 54.5 54.7

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