In the bigger picture, today was all about confirming and consolidating yesterday's gains.  Trading levels held inside narrow ranges for both MBS and Treasuries, and neither were flustered when stocks swooped back up toward yesterday's highs.

MBS did a better job of being "less flustered" today--i.e. Fannie 3.0s gained 3/32nds in price while 10yr Treasuries lost 2/32nds--for a few reasons.  First, there's the corporate bond calendar.  Issuance was by no means active.  In fact, there was only one announcement.  But the company in question was Apple--well known for their big corporate bond offerings. Here's a refresher on how corporate bonds impact other rates if you need it.  The takeaway is that Treasuries are more affected than MBS.

MBS also tend to reap marginal benefits on any day with large, scheduled purchases from the Fed--especially in the Fannie/Freddie 30yr sector.  Today was such a day, and that likely added to the outperformance.  Finally, it could simply be the case that month-end bond buying is being kinder to MBS than Treasuries, but either way, the first 2 factors are more than enough to justify the discrepancy.

The 7yr Treasury auction was strong, but it had a limited impact.  For all intents and purposes, bond markets were just flat.  That's a great thing when it follows a day with a substantial rally.  Keep in mind that the Bank of Japan will have a policy announcement overnight, and that could cause volatility in the morning (or before, for that matter).  Sorry, there's no way to know if that volatility is more likely to help or hurt us.


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 3.0
103-27 : +0-03
Treasuries
10 YR
1.5080 : -0.0070
Pricing as of 7/28/16 4:57PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
2:57PM  :  Some Erratic Movement in MBS, Specifically
9:38AM  :  Under Modest Pressure at CME Open; Corporate Supply Issues

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Matthew Graham  :  "B+"
Matthew Graham  :  "RTRS - U.S. SELLS $28 BLN 7-YEAR NOTES AT HIGH YIELD 1.340 PCT, AWARDS 55.12 PCT OF BIDS AT HIGH"
Matthew Graham  :  "7yr auction coming up. 4 out of the last 4 have come in at lower-than-expected yields. The current expectation is 1.341. The bid-to-cover has been stable in the upper 2.5's. Indirect bidders have taken an average of 64%. If you're not sure what any of this means, but want to learn more, check the primer: Treasury Auction Jargon, Definition, and Significance "
Sung Kim  :  "what a slashing"
Victor Burek  :  "Atlanta Fed Slashed its Q2 GDP Estimate To 1.8%, Cycle Low"