Bond markets had a bad day.  The setup for this one started as early as Tuesday, when what looked like a shift toward weakness on Monday was instead greeted with a refreshing amount of resilience.  Despite the fact that the resilience was based on geopolitical risk, it may have nonetheless set us up to hope that we could hold our ground.  Then, when today's Geneva talks produced news of deescalation, bond markets were quickly forced to pay back some of the panic premium they'd benefited from earlier in the week.

The geopolitical story accounts for the brunt of the afternoon weakness, and perhaps some of the morning weakness.  Even then, the economic data was unequivocally stronger.  Jobless Claims continue hovering around territory they haven't hovered around since before the crisis.  The Philly Fed index also came in much stronger than expected with solid a solid read on employment. 

By the time you combine the strong data, soothing Ukraine headlines, and the holiday-shortened trading day/week, it was enough for an abrupt snowball sell-off--and one that seemingly came out of left field.  Lenders repriced in droves, and the range-trade gets a substantial dose of confirmation (in that any surprising strength today would have challenged recent lows, but surprising weakness merely preserves the sideways range).

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
96-19 : -0-20
FNMA 3.5
100-22 : -0-18
FNMA 4.0
103-31 : -0-15
2 YR
0.3993 : +0.0243
10 YR
2.7206 : +0.0836
30 YR
3.5168 : +0.0638
Pricing as of 4/17/14 3:02PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
12:10PM  :  ALERT ISSUED: Selling Ramps up; Negative Reprices All but Guaranteed
11:37AM  :  ALERT ISSUED: Another Incremental Increase for Negative Reprice Risk
10:18AM  :  ALERT ISSUED: Resilient no More; Bonds Break Supportive Levels; More Reprice Potential
10:07AM  :  ALERT ISSUED: Bond Markets Slightly Weaker after Philly Fed Data; Reprice Risk Already a Consideration
9:23AM  :  Back Near Unchanged Levels Ahead of Stock Open
8:36AM  :  Bond Markets Weaker into Domestic Session and After Stronger Claims Data

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Matthew Graham  :  "Could also be a big block trade in 10yr futures. That actually lines up better with the spike and would also satisfy the "last trade moves whole pile" observation."
Scott Rieke  :  "I need some clarity here... what's a domestic partnership between non-same-sex couples? Is that "common law"... but not married?"
Michael Dormer  :  "Ha! I have that state disclosure too, SR. And yes, my interpretation of that is common law."
Matthew Graham  :  "Not sure if this news was making rounds before it hit the wires, but this is another possible motivation for the 12:03pm spike: RTRS - RUSSIAN FOREIGN MINISTER LAVROV SAYS ALL SIDES AGREED TO TAKE STEPS TO DE-ESCALATE UKRAINE TENSION, INCLUDING REFRAINING FROM VIOLENCE "
Chip Harris  :  "Wow. Interbank is .625 off from this morning on the 15 year. Lock desk is closed so probably going to get even worse."
Sung Kim  :  "and so much for the death cross trade"