Last week saw the yields increasingly hold inside the "new narrow" range between 1.54 and 1.59.  Frankly, I felt like it was a long shot for that range to persist all the way to Fed day, yet here we are on the eve of tomorrow's Fed announcement with a intraday high of 1.589 and a low of 1.537.  Close enough!  

The quintessential market-watching theme is that bonds are simply "sideways in a narrow range ahead of important data."  The logical conclusion is that the important data should provide the motivation to break from the sideways range and potentially begin to establish the next trend.  

With all of the above in mind, there's really not much to do until the range is broken or the "important event" passes without causing a range breakout.

In terms of movement that took place inside the narrow overall range, 'tradeflows' were the biggest motivation, despite the presence of some stronger economic data at 10am.  New Home Sales (592k vs 560k forecast) and Consumer Confidence (97.3 vs 95.9 forecast) DID have a small impact on bonds, but much bigger movements were seen at 9:30 and just after 2pm.  These are 2 of the 3 most active times of any given day for trading that has no direct connection to concurrent economic data or newswires. 

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
103-13 : -0-01
10 YR
1.5630 : -0.0100
Pricing as of 7/26/16 6:24PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
2:15PM  :  Bonds Battle Back in Light Trading; Reprice Risk Fades
1:05PM  :  ALERT ISSUED: Negative Reprice Risk After Bad 5yr Auction
10:07AM  :  ALERT ISSUED: Bonds Hit Weakest Levels After Data

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Matt Hodges  :  "great huddle...less than 3 minutes to distill down today's movements and risk/rewards for rest of week. Hey, and we get your calm and soothing voice as a bonus."
Matthew Graham  :  "yes, because the Fed's rate is expressed in a range between 0.25 and 0.5"
John Sheadel  :  "Just looking at the econ calendar for tomorrow. For the FOMC rate decision tomorrow, it has 0.375 listed... ?"
Mike Drews  :  "we are just about to the tip of the consolidation flag"
Scott Valins  :  "HOLD"
Ted Rood  :  "so much like my Calculus 201 grade?"
Matthew Graham  :  "D"
Matthew Graham  :  "RTRS - U.S. 5-YEAR NOTES BID-TO-COVER RATIO 2.27, NON-COMP BIDS $30.11 MLN"
Matthew Graham  :  "5yr auction coming up. When-issued yields (essentially the "forecast" for the auction) are trading around 1.165, and 5yr auctions have tended to come in OVER those forecasts by about half a point. Average bid-to-cover has been just over 2.4, and indirect bidding has averaged 60%. For more on these potentially confusing terms, read the primer: Treasury Auction Jargon, Definition, and Significance "
Hugh W. Page  :  "It's amazing now in this business. Years ago someone would ask you a simple mortgage question and you would answer right away with confidence. Now, more than ever, the answer is "I'll have to get back to you" :)"