We've been tracking a package from the BLS and new it was getting close as of Wednesday morning's major focus on employment metrics.  Today we heard the proverbial "doorbell, thud, and rumble of the diesel engine restarting."  When we opened the package, it was basically a mix of water balloons, thumb tacks, and gremlins.  Not cool NFP...  Not cool at all.

As to whether or not we will be able to return this particular package, it really depends on Europe.  I know that sounds weird considering we've just experienced a lot of negativity due to domestic economic data and domestic monetary policy expectations, but it's not quite that simple.

Europe is like the current in our ocean, and domestic affairs are like the waves as far as bond markets are concerned at the moment.  The waves have been nasty lately.  What's really scary is that the current has died as of the beginning of February--that is to say the momentum toward lower rates in Europe paused. 

As we've discussed time and time again, whenever it looks like Europe might be putting in the big bounce, US rates markets reserve the right to freak out, because Europe is the biggest reason we're as low as we are, and perhaps the only reason that US rates had to chase an incessant rally in 2014.  Without that motivation, there's a lot of "unwinding" that would need to be done, and US rates markets would waste no time in doing that if they could be sure Europe had turned a corner.

The waves will be the waves, but I'm still more concerned with this slack current.  If it reverses, there will be no way to keep the gremlins from getting wet.

MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.
MBS
FNMA 3.0
100-20 : -0-26
FNMA 3.5
103-30 : -0-17
FNMA 4.0
106-14 : -0-08
Treasuries
2 YR
0.7270 : +0.0840
10 YR
2.2470 : +0.1300
30 YR
2.8450 : +0.1190
Pricing as of 3/6/15 6:15PMEST
Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
12:03PM  :  ALERT ISSUED: MBS-Specific Weakness Dials Up a Bit More Reprice Risk
10:16AM  :  ALERT ISSUED: At This Point, Some Lenders Might Consider a Negative Reprice
9:55AM  :  Quintessential 'Fedspectations' Trade; Bonds Getting Hit; Stocks Won't Help
8:34AM  :  ALERT ISSUED: First Move After NFP is Much Weaker
8:21AM  :  NFP LIKELY DELAYED DUE TO WEATHER
MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Matthew Graham  :  "This is a pretty scary accurate statement in hindsight: "It's possible that factual confirmation of QE would have a temporarily positive effect on the parts of the bond market that stand to benefit from the tradeflows, but apart from that, markets have already done their best to buy this rumor. There's really nowhere to go but higher in rates unless the Eurozone keeps deflating and decelerating.""
Matthew Graham  :  "Mostly in bits and pieces, but here's the one reference piece from before it was announced: http://mndne.ws/1us6nyM"
DIRK POSTUPACK  :  "MG, has Europe's QE started, and if so, how if any does that affect or our bond / mbs market? If you have already addressed this please let me know where to find it."
Joshua Cederlof  :  "Just throwing out a ray of sunshine in the darkness.. because of MBSLIVE and real time market access, I locked a deal this morning. I've been working for a year helping him navigate while looking for a home. Just recently he felt the need to shop me and he is under contract. Safe to say the shopping is done. Subscription justified... again. "
Matthew Graham  :  "RTRS- FED'S LACKER SAYS CENTRAL BANK DOES NOT NEED TO SEE WAGE INFLATION BEFORE IT RAISES INTEREST RATES"
Matthew Graham  :  "RTRS- FED'S LACKER SAYS HE SEES JUNE AS THE LEADING CANDIDATE FOR THE MONTH FOR THE FED TO RAISE INTEREST RATES"
Mark Gordon  :  "MG just got a shout out on CNBC!"