This morning's commentary invoked some figurative language evokes notions of seasonality (have you ever seen invoke and evoke used in the same sentence?! but I digress).  Even that early in the day, I had a sinking feeling that--although the sun had risen for bond markets during the first 3 days of the week--it might be setting today.

There was no crystal ball involved here--just a simple set of lines and some early morning momentum that suggested the following consolidation pattern might be getting more confirmation.

2017-2-9 consol

The nice thing about this consolidation pattern is that the setting of the sun doesn't necessarily connote a long and scary night.  Today alone was enough to traverse almost half the darkness.  Things wouldn't get too scary until/unless rates moved up and out of the this pattern.  I don't have a Hemingway allusion or other witty metaphors for that eventuality, but given that we're talking about sunsets and the night, something to do with 'bad dreams,' seems in order.  We'll cross that bridge if we come to it though.

For those of you interested in specific "cause-and-effect" type market movers today, you're mostly out of luck.  After all, the 30yr Treasury auction was fairly strong and bonds merely continued to sell-off.  The tried and true (and frequently incorrect) argument about stock gains hurting bonds is actually worth a try today.  It's true that stocks experienced a breakout that coincided with bonds bouncing.

2017-2-9 stocks


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
102-11 : -0-17
Treasuries
10 YR
2.3966 : +0.0566
Pricing as of 2/9/17 5:56PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
3:16PM  :  ALERT ISSUED: Negative Reprice Risk Increasing for Some Lenders
1:10PM  :  Relatively Strong 30yr Auction, But No Improvement for Bonds
10:43AM  :  ALERT ISSUED: Negative Reprice Risk On a Fence; Some Levels to Watch
10:07AM  :  ALERT ISSUED: Bonds Back to Weakest Levels; Potential Volatility Ahead

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Ted Rood  :  "what if there's an executive order forbidding rescission?"
Hugh W. Page  :  "will be in recession before that ever consumates"
Matthew Graham  :  "it's around 4 trillion right now, so no... they certainly must know that putting 2.5 trillion dollars of supply back on the market is a big deal. Bottom line, it's going to have to be done very slowly or not at all. They've been surprised in the past by how reality has met their expectations. I wouldn't be surprised if they were surprised again."
Justin Harward  :  "seems like the usual case of the fed trying to project a vision of optimisim :)"
Hugh W. Page  :  "They have no idea. It's never been tried before at this magnitude."
Justin Harward  :  "They really think they can sell off their balance sheet without tanking the market?"
Matthew Graham  :  "RTRS - FED'S EVANS: $1.5 TRILLION IS ONE POSSIBLE TARGET FOR LONGER-TERM SIZE OF FED BALANCE SHEET"
Matthew Graham  :  "RTRS - FED'S EVANS: WILL DISCUSS HALTING PORTFOLIO REINVESTMENTS AFTER 'A FEW MORE' RATE HIKES"