In terms of interesting, singular market-moving events, only one thing happened today.  It was at 4am that headlines came out suggesting a ceasefire between Ukraine and Russia was already a done deal.  Stocks rallied and bonds sold off instantly.

And that was the last notable headline and market reaction of the entire day for bonds!

Everything since then has merely been a slow, uneventful grind back in the other direction.  We can seek to understand that bounce back in several ways. Here are a few contenders:

- Markets don't really care about geopolitics as much as it might seem.  Instead, such headlines are used as cover to facilitate trading goals.  The current goal may have been to book profits from bets on lower rates, or to simply exit trading positions ahead of 2 days of volatility

- Corporate debt issuance goes both ways.  When big firms issue debt, they can SELL Treasuries earlier on in the process, but end up BUYING them back later on.  Given the recent level of corporate bond issuance, it's not unlikely that there were some of these buybacks going on.

- The ceasefire itself wasn't actually that impressive beyond on the initial headline.  No additional reassuring news came out, and the only meaningful follow up was when Russia said they're not part of a ceasefire because they're not fighting with Ukraine (the implication being it's the pro-Russia separatists who, of course, have nothing to do with Russia... of course).

Whatever the case, bond markets came roaring back in slow motion.  The bounce looks more exciting against a 2-day backdrop.  In a slightly broader context, we just barely made it back to last week's worst levels.

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
99-10 : +0-07
FNMA 3.5
102-27 : +0-06
FNMA 4.0
105-31 : +0-06
2 YR
0.5200 : -0.0080
10 YR
2.3980 : -0.0210
30 YR
3.1430 : -0.0300
Pricing as of 9/3/14 5:11PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
2:01PM  :  Trading Levels Pushing For Positive Reprices; Lenders Hesitant so Far
9:06AM  :  Much Weaker Overnight on Ukraine Ceasefire Headlines; Bouncing Back a Bit

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Matthew Graham  :  "I haven't read everything that everyone has ever written on it, but I would say that seems like the consensus, JA."
Hugh W. Page  :  "I agree. The only sharp reaction we get is if we get surprised with actual ECB action!"
Jeff Anderson  :  "They're not ready to do anything for at least a few months, right? If not later."
Matthew Graham  :  "re German stimulus:"
Matthew Graham  :  "why market reaction if market probably isn't expecting much? Plus there's the potential German stimulus. It just doesn't seem like the right time. "
Andy Pada, Jr.  :  "i'm concerned about more teasing and a market reaction."
Victor Burek  :  "so far that has worked"
Hugh W. Page  :  "More teasing with no action"
Victor Burek  :  "i think market expects draghi to speak much more about abs and maybe give hints as to when it could start"
Andy Pada, Jr.  :  "so you think market is expecting status quo?"
Victor Burek  :  "but the presser will be important for what he says about the potential of and when abs could start"
Victor Burek  :  "they will announce any change in rate at 745 or new program...but i think it is pretty much consensus they wont announce abs tomorrow..."
Victor Burek  :  "the announcement at 745"
Andy Pada, Jr.  :  "will the announcement be made prior to Draghi?"
Victor Burek  :  "draghi at 830est"
Andy Pada, Jr.  :  "what time is ECB tomorrow?"