Surprise!  It's another mega-rally day.  Depending on your yardstick, this is the 5th or 6th mega rally so far this year.  Considering there have only been 21 business days, that's a pretty good batting average. 

To be fair, today's was actually the biggest day-over-day gain, and it takes us to the strongest levels since April 2015.  But wait, there's more.  Today's rally wasn't nearly so beholden to stocks and oil as other mega-rallies have been.  Bond markets moved into stronger territory of their own volition.  It's not that stocks and oil didn't corroborate the move--just that bonds were already well on their way, and they vastly outperformed the amount of gains that the stock/oil weakness would typically suggest.  This chart appeared in a mid-day update on MBS Live, but it captures the phenomenon well:

02016-2-2 bonds, stocks, oil

That's the sort of thing that just doesn't happen unless the bond market has its own specific reasons for moving.  While there's no convenient list of reasons published on the back page of the evening times, there are a few usual suspects among traders.  These primarily include the technical/tradeflow based accounts that can take trading cues from the trading itself (as opposed to the fundamental economic and market data).  In other words, "momentum in trading positions" (snowball buying) was a factor.


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 3.5
104-26 : +0-01
Treasuries
10 YR
1.8520 : -0.1140
Pricing as of 2/2/16 5:41PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
9:49AM  :  Visual Examples of Bonds' Outperformance and the 8:20am Impact
9:40AM  :  Big, Bond-Market-Specific Rally

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Matthew Graham  :  "they may have to buy some Treasuries"
Edgar Young  :  "what will that mean MG?"
Matthew Graham  :  "RTRS - JAPAN'S MINISTRY OF FINANCE IS EXPECTED TO ANNOUNCE WEDNESDAY THE FIRST-EVER DECISION TO CALL OFF SALES OF 10-YEAR JGBS- NIKKEI"
Timothy Baron  :  "Great link. Thanks HP."
Bryce Schetselaar  :  "BM-Do you have documentation for that? I had someone asking about it the other day"
Brian McFarlane  :  "guarantee fees both annual and upfront, funding fees, PMI amd MI are all covered as eligible mortgage insurance under IRS code"
Ted Rood  :  "That article on housing appreciation in Newstream is perfect for sending to referral partners and clients, particularly if they live in the areas with biggest gains!"