It was the first day back from the holiday market delirium and market participants needed a touchstone to kick things off.  They found it in the form of manufacturing data out of China.  This might not have been too big of a deal had it happened in the middle of the year, but it was today's muse for most of the morning.

China's CSI300 index dropped 7%, which is the "circuit breaker" level resulting in trading shutting down.  Other indices continued to trade... poorly.  The weakness in Asian equities markets spilled over into global equities markets.  It also translated to strength for safe havens such as US Treasuries. 

Domestic bond markets rode that wave until European markets closed.  At that point, gains began to evaporate.  The losses were quick enough for several negative reprices in the mortgage world, but day-over-day gains remained intact by the close.

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
100-03 : -0-01
FNMA 3.5
103-08 : -0-01
FNMA 4.0
105-28 : -0-01
2 YR
1.0360 : +0.0000
10 YR
2.2410 : -0.0040
30 YR
2.9830 : -0.0060
Pricing as of 1/4/16 6:56PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
4:57PM  :  Lingering Negative Reprice Risk
2:21PM  :  ALERT ISSUED: Edging Closer to Negative Reprice Risk
10:04AM  :  What's Behind This Morning's Rally?

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Caroline Roy  :  "Just saw this on the local MLS. Maybe my favorite listing details ever: Great Views from this 20 acre parcel horse property. Listing agent has not seen the interior of the home. Property was foreclosed on. Previous owner still remain in the property. No showings...! Buyers responsible for eviction of residents after the close of escrow. This property is being sold in as-is condition with no warranties expressed or implied. Please do not go on the property."
Matthew Graham  :  "They typically outperform during sell-offs. With both in the green, Treasuries are more likely to be outperforming day-over-day."
Ted Rood  :  "so much for MBS outperforming treasuries."
Timothy Baron  :  "VA appraisal timeliness requirements vary by region."
Oliver Orlicki  :  "you can sure as hell push them"
Eric Weishaar  :  "VA appraisers are given 10 business days to return the report, can't contact them until that passes"
Chip Harris  :  "Strange. Guess the seller is stuck until the appraisal comes in, whenever that may be."
Clayton Sandy  :  "there's the escape clause, but i've never heard that before. Should defer to what the contract states."
Chip Harris  :  "Anyone know about VA appraisal deadlines in a contract? I have one that the appraisal is not in yet, so asked for an amend to change that but the agent said that's not needed as the VA doesn't allow for appraisal deadlines anyway. Seems odd that the seller would have to keep the home off the market and have no appraisal deadline."