This has been one of the craziest NFP mornings I can remember--probably THE single most paradoxical reaction at first glance.  Granted, bond markets tanked at first following the 288k payrolls print (vs 210k forecast), but a few minutes later, began a slog that has now taken them all the way back to positive territory.

The only reasonable explanation for this is the pick up in geopolitical risk this morning with the focal point being Russia issuing a request for a meeting with the UN Security Council.  That meeting will take place today.

In addition to that headline, many others are floating around, building an increasingly risky picture overall.  These include things like helicopters being shot down, fatal gunfights, claims of Russian troops crossing the Ukrainian border and subsequent denial of those claims in a separate newswire.

The Ukraine-related headlines hit a bond market that was already showing some potential predisposition toward strength yesterday, but we can't rule out the possibility that they were already a factor then, but simply unpublicized.   Whatever the case, the headlines have ostensibly been the critical factor in turning a "resilient sell-off" in bond markets into a complete reversal.

MBS are an eighth of a point into positive territory after being more than 3/8ths of a point lower immediately following NFP.  10yr yields are right in line with yesterday's best levels at 2.597 but were as low as 2.576 earlier. 

Much like yesterday's paradoxical strength was difficult to "trust" from a longevity standpoint, today's strength is one of those things that we're lucky to have while we have it, but that can't be counted on sticking around.  The unfortunate exception would be further escalation of violence in Ukraine. 

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
97-27 : +0-03
FNMA 3.5
101-29 : +0-03
FNMA 4.0
105-02 : +0-04
2 YR
0.4383 : +0.0283
10 YR
2.6005 : -0.0055
30 YR
3.3741 : -0.0299
Pricing as of 5/2/14 12:17PMEST

Morning Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
10:56AM  :  ALERT ISSUED: Bond Markets Move Into Positive Territory (Really)
10:07AM  :  Utterly Shocking Resilience in Bond Markets
8:34AM  :  Nonfarm Payrolls 288k vs 210k Forecast; Bonds Tanking

Live Chat Featured Comments
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
John Tassios  :  "Bond market calm for now so far, hopefully a good sign"
Victor Burek  :  "things really heating up in Ukraine"
Victor Burek  :  "2 Ukrainian helicopters shot down by seperatists"
Matthew Graham  :  "RTRS- U.S. APRIL NONFARM PAYROLLS +288,000, BIGGEST RISE SINCE JAN 2012 (CONSENSUS +210,000) VS MARCH +203,000 (PREV +192,000), FEB +222,000 (PREV +197,000)"
Victor Burek  :  "earnings flat..wages not keeping up with inflation"
Brent Borcherding  :  "That's all nice, Vic, but you know that 288K and 6.3 is all that matters today."
Victor Burek  :  "i disagree, if that was all that mattered, we would be much worse off "
Matthew Graham  :  "what a ridiculously small bond market reaction so far"
Jeff Anderson  :  "Wow. 288k and down -4. Pretty amazing."
Matthew Graham  :  "looks like the jig is up"
Matthew Graham  :  "in other words, it does indeed look like bonds were ready to rally on anything close to consensus, and the big beat threw a bit of a wrench in the works."
Scott Valins  :  "secondary desks must be struggling with pricing right now"
Joseph Daquino  :  "This kind of activity makes me scared to come in on Monday if tensions subside over the weekend."