Bonds were stronger during Asian market hours this morning, but things changed quickly as European trading got underway.  Relative to Treasuries, European bond markets blasted toward higher yields fairly quickly.  Blame can be spread fairly evenly between data, new debt supply, and the ongoing selling trend in global bond markets.  (New debt supply refers to new bonds coming to market, competing for investors' affections.  Econ 101: higher supply = lower prices).

This morning's economic data didn't present too big a hurdle for bond markets.  New Home Sales came in just shy of expectations and the previous reading was revised down from 609k to 575k.  If any data had a noticeable effect, it was the oil inventory report at 10:30am.  Treasuries and MBS have had limited correlation with oil prices, but bigger spikes in oil tend to have temporary effects, and today was no exception.

Still, the biggest underlying challenge for bonds--and the reason they couldn't seem to catch a break today--is the supply situation.  Not only do we have Treasury auctions this week, but corporate bond issuance has been active as well.  As usual, corporate issuance proved to be a bigger thorn in the side of Treasuries.  MBS still lost ground, but not nearly as much (Fannie 3.0s down 5/32nds in price vs 10yr Notes 10/32nds).


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
103-05 : -0-04
Treasuries
10 YR
1.7910 : +0.0330
Pricing as of 10/26/16 5:40PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
4:46PM  :  ALERT ISSUED: MBS at New Lows, But Range Remains Narrow
10:45AM  :  ALERT ISSUED: Big Oil Price Spike. Small Spillover Into Bonds
8:57AM  :  Bonds Under Pressure From EU and UK

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Matthew Graham  :  "no significant implication for us"
Matthew Graham  :  "solid B"
Matthew Graham  :  "RTRS - U.S. 5-YEAR NOTES BID-TO-COVER RATIO 2.49, NON-COMP BIDS $33.70 MLN"
Matthew Graham  :  "RTRS - U.S. SELLS $34 BLN 5-YEAR NOTES AT HIGH YIELD 1.303 PCT, AWARDS 6.51 PCT OF BIDS AT HIGH"
Matthew Graham  :  "5yr auction coming up. Traders are currently expecting the yield to come in around 1.302 based on when-issued trading. Bid-to-cover has ranged from 2.29x to 2.54x recently with a 2.4 average. Indirect bidding has ranged from 53.6 to 68.7% with a 61% average. If this is all Greek to you, check out: Treasury Auction Jargon, Definition, and Significance "