Salient, easily-identifiable motivations for bond market movements continue to be elusive.    The times of the day where liquidity (numbers of buyers and sellers) shifts gears continue to see the lion's share of activity.  Trading has been easier to understand on a broad, thematic level.

Today's theme is similar to yesterday's: investors are a bit uncertain and a bit cautious.  Everyone's best guess seems to be that "politics!" is the key motivation (i.e. challenges facing some of the new administration's first actions as well as overseas election uncertainty/implications).

The "uncertainty theme" is reflected in overnight bond market gains as well as stocks stalling at the NYSE Open (and finishing weaker).  As stocks fell throughout the day, bond yields moved lower in concert.  

The 1pm 3yr Treasury auction provided one final boost for the rally, but that tipped the balance back in favor of sellers.  Trading levels deteriorated just a bit heading into the close, although not enough for lenders to reprice.  10yr yields were ultimately 2bps lower vs yesterday, and Fannie 3.5 MBS were an eighth of a point higher.


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
102-18 : +0-04
Treasuries
10 YR
2.3967 : -0.0163
Pricing as of 2/7/17 5:40PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
12:41PM  :  Bonds Extend Gains as Consolidation Pattern Breaks
9:58AM  :  Bouncing Leveling-Off After Early Weakness

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
John Tassios  :  "I guess we find out next 2 days if buyers come in at these lower yield levels MG. ( if long end stays here )"
Matthew Graham  :  "just remember that ratings on 2 and 3yr auctions don't really matter. A strong short-duration auction isn't necessarily a good thing for us."
David Rudnick  :  "I always wait for the rating.... I dont know the dif between A and F otherwise"
Victor Burek  :  "nice"
Matthew Graham  :  "A-"
Matthew Graham  :  "RTRS - U.S. 3-YEAR NOTES BID-TO-COVER RATIO 2.78, NON-COMP BIDS $50.46 MLN"
Matthew Graham  :  "RTRS - PRIMARY DEALERS TAKE 34.69 PCT OF U.S. 3-YEAR NOTES SALE, DIRECT 8.1 PCT AND INDIRECT 57.21 PCT"
Matthew Graham  :  "RTRS - U.S. SELLS $24 BLN 3-YEAR NOTES AT HIGH YIELD 1.423 PCT, AWARDS 13.03 PCT OF BIDS AT HIGH"
Matthew Graham  :  "Current expectation is 1.43"
Matthew Graham  :  "Yields have tended to come in below the 1pm expectations by 0.4 bps"
Matthew Graham  :  "Recent average bid-to-cover has been 2.83 (range 2.65-2.97)."
Matthew Graham  :  "3yr auction preview (if the following is confusing, here's the decoder ring: Where can I find definitions to abbreviations and other Terminology, Jargon? )"