The last two days were nice while they lasted, but today's trading levels are right back in line with most of last week.  In other words, bonds sold off today.  The weakness hit markets like a ton of bricks right at 5am.  Draw your own conclusions, but this is when Europe's CPI reading came out in line with expectations.  The last 3 readings of EU CPI have also been in line with forecasts or better, and each day has seen a significant sell-off.

The implication is that markets are doing some mental math on the necessity for ongoing QE and tacitly determining that stable inflation in the Eurozone means that QE could be ended early.  It's actually quite remarkable how well 2015's bounce coincides with improvements in CPI.

All of the above was good enough for 10yr yields to sell-off up into the 2.4's before domestic data even flashed.  Once ADP employment came in better than expected, the selling continued.

Greek PM Tsipras spoke just before 10:30am and basically said the whole EU bailout effort of Greece stunk!  It's blackmail!  And he expects his people to vote against it in the referendum coming up this weekend.  He claimed that a "no" vote wouldn't mean that Greece leaves the Eurozone.  He showed his bargaining manual in saying a "no" vote was a necessary step in order to get a better agreement. 

While that last point essentially sums up Greece's entire negotiation strategy, it didn't make markets think an agreement was any more likely.  This was helpful for bonds, and it was here that the losses stopped for the day.  There wasn't much of a bounce back, but  it was enough for trading levels to hold steady in Treasuries through the close.  MBS underperformed, however, with Fannie 3.5s heading out at the weakest levels of the day.

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
98-27 : -0-17
FNMA 3.5
102-13 : -0-14
FNMA 4.0
105-15 : -0-10
2 YR
0.6920 : +0.0470
10 YR
2.4270 : +0.0780
30 YR
3.2070 : +0.0880
Pricing as of 7/1/15 5:38PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
1:20PM  :  ALERT ISSUED: Negative Reprice Risk for Some Lenders
8:24AM  :  ALERT ISSUED: ADP Stronger. Overnight Weakness Remains Intact

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Joe Gistaro  :  "2106 expenses 100 funds towards reserves lots of goodies"
Frank Hanna  :  "Yup, my favorite is disposal of a current primary home"
Joe Gistaro  :  "Major FNMA changes SEL-2015-07 "
Jason Anker  :  "Employment-Related Assets as Qualifying Income"
Jason Anker  :  "the guide has the formula in it"
JEREMEY BECK  :  "hey gang - i posted a question yesterday about setting up retirement distribution as income for retirement age client. my All-regs link doesn't list the % of the balance that i can use. is it 60% of the balance / 36 months. correct?"