Last Friday's NFP had immediate implications for financial markets.  It meant that there could now be a relatively unanimous agreement on a December rate hike.  Markets quickly moved to 'price in' that reality.

Those sorts of sell-offs that occur in the heat of the moment have different characteristics from the general selling pressure that can follow.  We're now seeing such pressure.

If the Fed hike is more likely, then the implication is negative for both stocks and bonds.  The stock market weakness is a bit of a complicating factor for bonds, because the proceeds from stock sales could end up benefiting bond markets to some extent.  By and large, most of the money is turning into cash or functionally equivalent vehicles such as ultra-short term debt.

Another problem for bond markets is corporate debt issuance.  Keeping in line with the "winter is coming" mentality, corporations are rushing to issue bonds before rates continue higher and before liquidity begins to decrease in earnest during the holiday season.  I'm seeing as manycorporate deals launched over the past 2 business days as I've seen on any 2 business days all year with no fewer than 23 tranches from 11 companies today alone.  This creates supply pressure for bond markets in general, and on a week that already suffers from the burden of Treasury supply with 3, 10, and 30yr auctions.


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
99-25 : -0-09
FNMA 3.5
103-03 : -0-07
FNMA 4.0
105-25 : -0-06
Treasuries
2 YR
0.8900 : +0.0000
10 YR
2.3530 : +0.0278
30 YR
3.1190 : +0.0329
Pricing as of 11/9/15 1:36PMEST

Morning Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
9:47AM  :  ALERT ISSUED: Some Risk of Negative Reprices From The Super Early Lenders
9:42AM  :  Winter is Coming; Markets Set About Storing Nuts (Cash)

Live Chat Featured Comments
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Jon Bodan  :  "MH, I spoke to DocMagic tech support last week. SP9 is already scheduled for December. In Point you're supposed to keep the Initial Fees Worksheet with your Loan Estimate...then copy everything to the Closing Costs Worksheet to do your CD. When you upload to DM historically, it pulls the fees/payees/etc from the IFW. Well, now it's supposed to pull from the CCW because Point say not to change your IFW to keep from breaking your LE compliance trail. Except....DM doesn't pull from the CCW. It's still the IFW because Point didn't update it. So we have to 'dial in' on the CCW in Point, then upload to DM, and then REDO all of it in DM by hand to issue a CD. What a joke."
Matt Hodges  :  "Calyx SP8...seriously"
Matthew Graham  :  "gut-plop works too. Grand Unified Theory of Panic Locking Origination Pipelines"
Michael Gillani  :  "That was prior to my vast education in GUTPLOP"
Matthew Graham  :  "Ah yes, the great false start of 2010. That was "fun.""
Michael Gillani  :  "Actually my dates were off. I believe it was Oct of 2010 that we sold off through the winter and then picked up steam again in April of 2011"
Michael Gillani  :  "Although, on the bright side, it's nice that we were rallying so hard ahead of this selloff so we're really about where we were in mid July. Not a horrible place to be IMO."
Matthew Graham  :  "The charts go back that far"
Michael Gillani  :  "Wasn't the last time we dealt with a late year selloff of major proportions back in 2011? I believe we hit the skids in mid October and didn't come back until we started to rally hard in April of 2012"
Christopher Stevens  :  "So rates are pressured higher until 12/16 then what....head back down as Europe loves our 'high' yields."