Bond markets have continued taking measured steps back from the strongest levels in nearly 3 weeks seen on Monday.  So far, today's selling pressure has been roughly in line with yesterday's.  This time, it's more about traders adjusting positions ahead of the Fed.  While that was also a factor yesterday, it was trumped by a much bigger slate of corporate debt issuance (companies rushed to issue their debt early in the week before Fed-induced volatility).

Economic data was a non-event this morning.  Pending Home Sales were weaker than expected and bond markets did nothing with that info.  In fact, there's only been another modest move higher in yields since 10am and it wasn't at all correlated with the Pending Sales data.  If anything, the most recent selling in bond began as equities markets improved following the 930am NYSE open.

Whatever reaction we might have seen to the 1pm 5yr Treasury auction will likely be muted by the impending release of the Fed Announcement at 2pm.  This assumes that bonds aren't already on the move leading up to the announcement.  That can happen, and if it happens in a negative way, lenders won't hesitate to reprice.  Conversely, positive reprice potential is always quite low ahead of the Fed, even if gains would otherwise justify it.


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
99-31 : -0-08
FNMA 3.5
103-07 : -0-07
FNMA 4.0
105-31 : -0-05
Treasuries
2 YR
0.7080 : +0.0380
10 YR
2.2880 : +0.0380
30 YR
2.9940 : +0.0310
Pricing as of 7/29/15 11:36AMEST

Morning Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
10:34AM  :  ALERT ISSUED: On The Edge of Negative Reprice Risk For Some Lenders
10:03AM  :  Modestly Weaker Overnight; Still Waiting Fed

Live Chat Featured Comments
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Matthew Graham  :  "Yeah, Pending Sales is rarely a market mover, even on non-Fed days"
Victor Burek  :  "today is about fomc"
Jon Leslie  :  "MG those negative #'s just came out should we have not seen movement the other way"
Matthew Graham  :  "RTRS- U.S. JUNE PENDING HOME SALES +8.2 PCT FROM JUNE 2014 - NAR"
Matthew Graham  :  "RTRS- U.S. JUNE PENDING HOME SALES INDEX -1.8 PCT (CONSENSUS +1.0 PCT) TO 110.3 - NAR"
Matthew Graham  :  "correct MH"
Matt Hodges  :  "but, no Yellen show, so that's not likely, right?"
Matthew Graham  :  "with effective fed funds already at 0.14 last night, it's not much of a hike, even if it happens today"
Matthew Graham  :  "that is the likely first move"
Matt Hodges  :  "not 0... 0-.25. Why not set .25, instead of a range "
John Tassios  :  "Fischer and the hawks on the committee are pushing hard for a hike in Sept to get off of 0. Doves will push back hard on falling inflation and stronger USD risks. Yellen will have a tough job today to find middle ground."
Dominick Cordone  :  "agree JT. I have to think they will remain the same, unless they want a litmus test prior to the sept meeting...which I would not enjoy...."
John Tassios  :  "my opinion, it will be a close call today on the language of stmt. If stmt looks pretty much the same as before, then prob no Sept rate hike. If FED changes language and states risks are more balanced or evenly balanced with both economic data and employment data, then that may be a set up to prepare markets for Sept trigger. The wild card will be language on inflation. also, secondary wild cards - mention of emerging market risks or any mention of europe or greece."