• Quiet overnight trading session with European markets closed
  • Economic data was mixed and left bond markets generally uninspired
  • Treasuries and MBS gained ground early thanks to Stock/Oil losses
  • Afternoon tradeflow considerations pushed bonds back toward weaker territory

Despite US markets being fully open, today managed to take the extended holiday weekend vibe and amplify it.  What is this vibe, you ask?  Nothing too crazy...  I'm just referencing the decreasing volumes, lighter liquidity (i.e. fewer buyers and sellers at the same price, regardless of volume), and consistent seeking-out of central technical levels.

Case in point, bond markets started out in unchanged territory (in line with Thursday's weaker levels) and soon found reason to head back toward the lower end of the recent range, without regard for the economic data.  In other words, if bonds were interested in reacting to the data, they had a good chance to do so after the 8:30am consumer spending data came in with a big negative revision (+0.1 vs +0.5 previously).  Instead, they waited until roughly 10:30 to make the bigger positive move of the day.

The rally may or may not have had much to do with news that the widely-followed GDPNow figures from the Atlanta Fed were updated to show a sharp contraction in Q1 GDP growth (from +1.4 to +0.6).  In turn, the subsequent sell-off may or may not have had much to do with corporate bond issuance that was happening around the same time.  What's more interesting is that trading levels precisely sought out intermediate moving averages that are associated with a LACK of conviction.  In other words, bonds are heading to the proverbial sidelines, likely in anticipation of bigger news ahead.  This could come in the form of a speech from Yellen tomorrow or the economic data in the rest of the week (including NFP Friday).

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
101-25 : -0-01
10 YR
1.8820 : -0.0110
Pricing as of 3/28/16 7:11PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
3:30PM  :  ALERT ISSUED: Very Slight Negative Reprice Risk For Only a Few Lenders
11:20AM  :  Bond Markets More Interested in Oil/Stocks vs Data

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Jason Anker  :  "residual is a black and white calc. you meet or you dont"
Jason Anker  :  "assuming you meet manual guides"
Nathan Miller  :  "so manual UW when Du won't take it as long as the residual inc meets the regional guideline"
Jason Anker  :  "70's but DTI is irrelevant"
Nathan Miller  :  "whats the highest dti you guys have seen DU approve on a VA purch recently?"