When it comes to the most simplistic charts of bond market trends, there are two "bad things" that rates could do in the current context.  One of the two bad things happened today.  10yr yields broke above the upper boundary of the consolidation trend that began in early December.  This refers to the converging white lines in the chart below.  

2017-2-15 close

As expected, the breakout was followed by additional momentum leading yields toward the 2.53% level.  Ideally, this is where we would see support in the event of a breakout and indeed we did.  The worst case scenario (the other "bad thing" mentioned above) is a ways off still.  That would involve yields breaking above the highs seen in December--something that would truly support a longer-term, bigger-picture move toward higher rates.

Today's weakness wasn't a foregone conclusion.  Bonds actually began the day well inside yesterday's range.  It wasn't until the 8:30am data came out (stronger Retail Sales and higher inflation via CPI) that bonds began selling-off.  Moments later, the highs of the day were in, and bonds managed to trickle back toward slightly smaller losses despite another record-setting day for 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
101-27 : -0-07
Treasuries
10 YR
2.4968 : +0.0268
Pricing as of 2/15/17 5:18PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
1:17PM  :  ALERT ISSUED: Negative Reprice Risk Increasingly For a Few Lenders
8:39AM  :  ALERT ISSUED: Stronger Data Pushes Bonds Out of Consolidation Range

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Ted Rood  :  "goal is to scare markets into position where rate hikes are unnecessary"
John Tassios  :  "not sure why FED speakers say all of this and then only end up doing 1 or possibly 2 hikes."
Andy Pada, Jr.  :  "man, this guy really turned to the dark side"
Matthew Graham  :  "RTRS - FED'S ROSENGREN: DELAYING TIGHTENING RISKS 'OVERSHOOTING' EMPLOYMENT, INFLATION GOALS"
Matthew Graham  :  "RTRS - FED'S ROSENGREN: MAY NEED TO HIKE RATES MORE AGGRESSIVELY THAN THREE TIMES PER YEAR"
Chris Kopec  :  "One way to resolve transcript issues is to use the IRS "where's my refund" portal, match it to the tax returns the client gives you, and then you can confirm the IRS has received the return within seconds."

Economic Calendar
Time Event Period Actual Forecast Prior
Wednesday, Feb 15
7:00 Mortgage Market Index w/e 379.0 393.6
8:30 Retail sales mm (%)* Jan +0.4 0.1 0.6
8:30 Core CPI Year/Year (%)* Jan +2.3 2.1 2.2
8:30 CPI mm, sa (%)* Jan +0.6 0.3 0.3
8:30 NY Fed manufacturing Feb +18.7 7.00 6.50
9:15 Industrial Production (%)* Jan -0.3 0.0 0.8
9:15 Capacity Utilization (%) Jan 75.3 75.5 75.5
10:00 Business inventories mm (% ) Dec +0.4 0.4 0.7
10:00 NAHB housing market indx Feb 65 67 67