• Bonds start strong after Bank of Japan Announcement'
  • Further improvements after weak Retail Sales revision
  • The gains served as a cue for traders to take chips off the table ahead of tomorrow's Fed events
  • Treasuries moved back into negative territory by the close, but only slightly
  • MBS underperformed with Fannie 3.0s losing 6 ticks on the day

Markets giveth and markets taketh away.  Bond markets started out in a 'givething' mood following the Bank of Japan policy announcement late last night.  Stocks and bond yields fell steadily into the start of the domestic session.  The weak revision in Retail Sales helped push yields as low as 1.915 a few minutes after the data, and that was apparently the signal for the 'takething' to begin.

Bonds weren't much concerned with stocks or oil prices during today's sell-off.  The only external markets that were arguably correlated were other bond markets, like German Bunds.  In fact, a sharp move in Bunds just before 10:30am was credited with pushing domestic bond markets into weaker territory at the fastest pace of the day.  

Even without the European influences, traders with short positions had been forced to cover (buy) in the wake of the Retail Sales data, thus leaving an imbalance of sellers heading into the mid-day hours.  That was the cue for traders with long positions (bets on rates moving lower) to cover (sell) ahead of tomorrow's FOMC events.  The net effect was relatively unchanged trading levels in Treasuries and underperformance in MBS, thanks to the volatility (and the absence of any scheduled Fed buying tomorrow).

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
101-11 : -0-06
10 YR
1.9680 : +0.0050
Pricing as of 3/15/16 5:36PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
1:57PM  :  ALERT ISSUED: If You Haven't Seen a Reprice Yet, You Probably Will
11:25AM  :  ALERT ISSUED: Negative Reprices Becoming Likely
10:34AM  :  ALERT ISSUED: Negative Reprice Risk Increasing
8:43AM  :  Positive Initial Reaction to Retail Sales Data

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Matthew Graham  :  "almost an utter and complete certainty"
Andy Pada, Jr.  :  "that should get revised lower, no"
Victor Burek  :  "7 of the fed members did"
Victor Burek  :  "fed members expect 4 more .25 rate hikes this year"
Joshua Crater  :  "please explain 7 dots on 1.4 by end of 2016"
Matthew Graham  :  "7 dots on 1.4 by the end of 2016. most of the rest saw lower. 3 saw higher"
Matthew Graham  :  "fortunately, they write this stuff down: http://www.federalreserve.gov/monetarypolicy/fomcprojtabl20151216.htm"
Victor Burek  :  "i thought the last dot chart showed 4 hikes this year"
Jason Anker  :  "very detailed guides on that one CS and depends on program"
Clayton Sandy  :  "as long as you have a history?"
Clayton Sandy  :  "can you use a car allowance for income?"
Andy Pada, Jr.  :  "what do the dots show?"
Hugh W. Page  :  "Clearer answer is YES they can"
Curt Sandfort  :  "can employer wait 6 months to pay you to make sure there is no recapture?"
Justin Heinz  :  "Can employer reverse commission on a buyback if borrower refi's during recapture?"