There were no major headlines this morning and no big economic reports behind bonds' big selling spree.  Some news stories suggested overnight bond weakness was a product of Japan foregoing a normal bond buying operation, thus signaling a step toward tapering asset purchases.  

While that may be on some investors' minds, you wouldn't have known it based on the initial reaction in overnight Treasury yields.  The first move higher/weaker happened at the European open.  Selling was only moderate overnight and largely recovered by the domestic open.

But then it was "game on."  Led by another surge in equities, bonds of all shapes and sizes joined the "risk on" move toward higher yields and higher stock prices.  The terribly weak 5yr Treasury auction only added to the negative momentum at 1pm ET.  10yr yields ultimately hit 2.538 before sellers had their fill.  

In the bigger picture, it looks like a thematic move is underway whereby financial markets have returned from a holiday intermission (which saw a nice break in the Nov-Dec sell-off) to buy more stocks and sell more bonds.

2017-1-25 Combo


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 3.5
101-27 : -0-07
Treasuries
10 YR
2.5153 : +0.0443
Pricing as of 1/25/17 5:37PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
1:06PM  :  ALERT ISSUED: 5 Year Auction was Horrible; More Negative Reprice Risk
12:33PM  :  ALERT ISSUED: Negative Reprices Becoming Likely For Some Lenders
9:33AM  :  ALERT ISSUED: Some Early Lenders May Already be Considering Reprices

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Jude Bridwell  :  "Bleeding out."
Matthew Graham  :  "was trading at 1.976 expected yield. Bid-to-cover is quite low as well. D-"
Matthew Graham  :  "RTRS - PRIMARY DEALERS TAKE 32.08 PCT OF U.S. 5-YEAR NOTES SALE, DIRECT 4.64 PCT AND INDIRECT 63.27 PCT"
Matthew Graham  :  "RTRS - U.S. 5-YEAR NOTES BID-TO-COVER RATIO 2.38, NON-COMP BIDS $44.56 MLN"
Matthew Graham  :  "RTRS - U.S. SELLS $34 BLN 5-YEAR NOTES AT HIGH YIELD 1.988 PCT, AWARDS 33.36 PCT OF BIDS AT HIGH"