Jobless Claims were exceptionally strong this morning, coming in low enough for such cute headline phrases as "lowest since 1973."  True, the number is indeed as low as it's been since 1973, but--well, there are so many "buts."  We'll forgo a discussion on the biggest counterpoints (like benefit exhaustion and job/wage quality) and instead focus on the biggest "but" today, which is that no one was around to file Jobless Claims last week!  The labor department even noted the seasonal issues in today's release.  As such, traders took it with a grain of salt.

It may have seemed like bond markets simply had a delayed reaction to the economic data, considering MBS and Treasuries weakened shortly thereafter, but there were other sources of market movement.  These included bigger moves in forex markets and a series of new corporate bond announcements.  But even then, Treasuries held firm at important technical levels (2.34 in 10yr yields).

The first stage of the elegant swan dive in rates began around 11am.  European markets were closing and domestic equities markets were falling even more sharply.  As we discussed in the Day Ahead, equities were worth watching today, but perhaps even more relevant than equities was the retreat in commodities prices.  Of course, commodities can take a hit as a barometer for the global growth engine, so there's always a chicken/egg discussion to be had, but regardless of which sector caused the most movement in the other, the fact remains that multiple sectors moved away from bets on growth.  Bond markets benefited from that--end of story.

Epilogue.  Because I know some folks might notice that we had some of the day's sharper gains at 1pm (second stage of swan dive), and that there was a 10yr TIPS auction at 1pm, we should talk about that for a second.  These things had absolutely nothing to do with each other.  The Treasury/MBS gains were in by 12:57pm, and had perfectly traced with steep selling in Crude Oil.  When the auction hit, bonds actually lost ground, at first.  Bottom line, the good old "global growth concern" dialogue is making a comeback.

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
99-31 : +0-06
FNMA 3.5
103-10 : +0-05
FNMA 4.0
106-03 : +0-03
2 YR
0.6980 : -0.0120
10 YR
2.2690 : -0.0580
30 YR
2.9690 : -0.0760
Pricing as of 7/23/15 5:59PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
10:01AM  :  Currencies, Europe, Stocks, All Helping Bonds Bounce Back
9:12AM  :  ALERT ISSUED: Early Negative Reprice Considerations
8:54AM  :  Paradoxical Reaction to Jobless Claims Data or Delayed Reaction?

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Sung Kim  :  "and even if you assume they have the same credit profile, they have different coupons which further exacerbates the difference"
Sung Kim  :  "they are not identical securities and if they gain 1:1, it is coincidence"
Sung Kim  :  "CH, TSY outperforming MBS on green days has been going on for a while"
Matthew Durso  :  "CH, as MG pointed out, all of this despite serious headwinds...I think we may see something different if the corp debt and econ data were more mbs friendly...just a hunch."
Steve Chizmadia  :  "If anything, these 7-8 days look like a good locking opportunity to me, not an iceberg to lower rates, but that's just my opinion. "
Ted Rood  :  "I imagine it may be a point of discussion. Like to see gains hold through close tomorrow, losing them overnight wouldn't be bullish."
Timothy Baron  :  "Pivot broken, perhaps. Need confirmation."
Matthew Durso  :  "Pivot point broken. Game on? Any larger extrapolations from this MG? Wait for recap?"