Today was another nice, simple day for bond markets.  Yields entered the domestic session slightly lower, thanks to weak data overseas.  Even then, we were very much in the thick of the recent range.  

There was always a decent enough chance that a big beat/miss in Retail Sales data would move markets, but ended up getting just a bit more economic data weakness than a "big miss" normally implies.

If we look solely at Retail Sales, it wasn't abysmally low, coming in at 0.0 vs expectations for a 0.4 percent increase.  But that's certainly low enough to get bonds moving in the right direction.  

Then there was Producer Price data.  Core PPI fell -0.3 percent month-over-month vs forecasts calling for a 0.2 percent gain.  Year-over-year, the index stood at +0.7 vs a median forecast of +1.2 and a previous reading of +1.3.  That's a big chunk of inflation that's suddenly gone missing, and it certainly added to the bull case for bonds.

Yields immediately moved to the lower end of the range.  In fact, at 1.48% in 10yr Treasuries, we could consider that to be the outer limits of the recent range, as 1.50-1.52 have gotten more action as a "floor."  Incidentally, yields rose into the afternoon and did indeed go out the door just over 1.51.  

Despite a bit of a give-back into the afternoon, bonds had a great day nonetheless.  Rate sheets were the best in a month and there were only a few negative reprices from the lenders with the perennially itchy trigger fingers.


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
103-25 : +0-05
Treasuries
10 YR
1.5100 : -0.0610
Pricing as of 8/12/16 4:23PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
12:54PM  :  ALERT ISSUED: Negative Reprice Risk Slowly Becoming a Consideration For a Few Lenders
8:35AM  :  Data Much Weaker Than Expected; Bonds Rallying

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Matt Hodges  :  "Noah: Ted Rood wrote about this, or something similar: http://www.mortgagenewsdaily.com/channels/community/317321.aspx"
Noah Thompson  :  "when a buyer is buying a home for their older parents do I run that as a 2nd home or Primary? Buyers current property is located in same city as the subject property."
Chip Harris  :  "low FHA rates is great, but MI for life sucks"
Curt Sandfort  :  "why fha clay?"
Brian McFarlane  :  "on raw pricing, I am sure it's not thin. But not many get access to that."
Sung Kim  :  "who says below 3 is thin?"
Clay Schmeisser  :  "Rates under 3% is sickkkkk... my FHA rate on my home is 2.875%. Anyone else have a low FHA rate on theirs?"
Brian McFarlane  :  "below 3 on VA is madness. Operating on margins that thin can't be a good business practice."