• Pointless, confused trading day for multiple markets
  • Bonds struggled sideways at first, then broke into weaker territory for no apparent reason
  • Stocks traded higher at the same time, but correlation is questionable
  • Best thought of as end-of-week position squaring 
  • Treasuries got hit harder than MBS, as per usual during sell-offs

Traders phoned it in today, beginning precisely at 11am.  This was painfully evident in the uncannily flat line in bond market charts from then until close.  10yr yields, for instance, easily held inside a 1bp range.  Fannie 3.0s held inside a 101-13 to 101-14 range.  Volume was unsurprisingly low.

Unfortunately, this flatness followed another dose of weakness in the mid-morning hours.  Although stocks were moving higher during that time, bond markets were definitely marching to their own beat.  With today's light volume, it's easier to conclude that some of yesterday's lingering long positions (those who stepped in to buy bonds when yields had risen enough) were taking those bets off the table before liquidity dried up completely.

As is typically the case during sell-offs, MBS outperformed Treasuries.  Whereas 10yr yields ended the session 4.4bps higher, MBS were only 6 ticks lower, and the average rate sheet was maybe higher by an implied 1-2bps.  Death by a thousand cuts, to whatever extent rates in the high 3's are deadly...

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
101-13 : -0-06
10 YR
1.9800 : +0.0510
Pricing as of 3/11/16 5:59PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
11:30AM  :  ALERT ISSUED: Reprices Soon, Guaranteed
10:27AM  :  ALERT ISSUED: Bonds Didn't Bounce; Negative Reprice Risks Increase
10:09AM  :  ALERT ISSUED: Reprice Risk Grows Unless Bonds Bounce Here

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Dominick Cordone  :  "i know a good psychiatrist, if that helps"
Tony Garcia  :  "Can any one here recommend good training material/courses for a brand new LO?"
Jason Anker  :  "like TRID so far, borrowers happy to have numbers nice and early"
Bryce Schetselaar  :  "what's the general consensus on the 3 day CD waiting period? In general, my buyers have been frustrated with it (when we have had to wait)"
Matthew Graham  :  "and here we are, hopefully to bounce, but we'll see next week I imagine."
Matthew Graham  :  ""Christopher Stevens: 3/4/16 11:37AM MG- what's the next resistance level you are watching" || Matthew Graham: 3/4/16 11:40AM haven't decided yet. 1.98 seemed meaningful in January"
Matthew Graham  :  "I would think of the 2.3 area as the maximum support levels, beyond which we'd be screwed. Before that, I like 1.98 as a pivot point, and then 2.11-ish"
Dominick Cordone  :  "i guess i meant pivot point, but you answered my question"
Matthew Graham  :  "I don't know what you mean by 'meaningful point.' Are you asking where rates will bounce? because I don't know. I don't know if 10's will make it to 2.3, but if they did, and if they bounced there, that would be epic (because it would be in line with the last series of big ceiling bounces from late 2015, thus building an even stronger case for "lower highs.""
Jason Anker  :  "enjoy"
Jason Anker  :  "2.3"
Dominick Cordone  :  "whats the next meaningful point we should be looking for MG? if this bludgeoning persists, that is"