Heading into the close at much stronger levels this afternoon, it would be easy to overlook the fact that bond markets were weaker overnight (following the Bank of Japan's underwhelming policy announcement) and remained in weaker territory right up to the 8:30am GDP release.  Who knows how momentum would have shaped up had GDP come in stronger than expected?  

While a weaker economy is unfortunate, its effect on interest rates is the opposite.  Bonds rallied purposefully after the +1.2 vs +2.6 percent GDP miss (not to mention the revision to the previous quarter from 1.1 to 0.8), coasting to a sideways and slightly stronger stop in the early afternoon.  Things stayed sideways until 2pm, at which point month-end bond buying momentum took over, nearly matching the strength of the post-GDP gains.

10yr yields hit 1.453 at the 3pm close and fannie 3.0s were up a quarter point to 104-03.  Next week brings a slew of economic data, including NFP on Friday.  


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
104-03 : +0-08
Treasuries
10 YR
1.4500 : -0.0610
Pricing as of 7/29/16 4:45PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
9:14AM  :  GDP Rivals FOMC as Week's Biggest Market Mover

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Hugh W. Page  :  "These videos are so good....."
Matthew Graham  :  "if only someone would talk about this in a video..."
Christopher Stevens  :  "Month-end momentum in bonds can be quite similar. If we see yields moving in a certain direction with conviction, traders who are more tactical and opportunistic may try to take advantage of that momentum by trading in the same direction of the momentum. This is one of the factors that typically fuels snowball trades."
Christopher Stevens  :  "careful floating on a month end friday"
Corey Weber  :  "Is this a locking Friday?"
Matthew Graham  :  "yes"
Scott Valins  :  "negative meaning betting on higher yields?"
Ted Rood  :  "is that like "Double Secret Probation"?"
Matthew Graham  :  "RTRS - JEFFREY GUNDLACH, CEO OF DOUBLELINE CAPITAL, SAYS FIRM WENT 'MAXIMUM NEGATIVE' ON TREASURIES IN EARLY JULY"
tim paxton  :  "NM it is rough here in OR right now..."
Jon Bodan  :  "in other breaking news, water is wet"
Nathan Miller  :  "hey got another Oregon deal where the only available appraiser can't get out until November, sweet!"
Jon Bodan  :  "well, duh. thanks Captain Obvious. lolkaplan"
Matthew Graham  :  "Ding ding ding!"
Matthew Graham  :  "RTRS - DALLAS FED'S KAPLAN SAYS NORMALIZING MONETARY POLICY IS GOING TO BE VERY CHALLENGING"