The big takeaway from yesterday's Fed reaction was that the rally was finite--not motivated by a new development, but rather by a correction to an overdone trade ahead of the Fed.  In other words, there was a magic line in the sand (the equilibrium point where traders made it back in line with Fed rate hike expectations) that would mark the end of the correction.

Today's trading raised the possibility that we've already reached that magic line.  Things began innocently enough with Treasuries holding fairly flat during Asian market hours.  European bond markets opened in stronger territory but weren't interested in staying their.   German Bunds  rose roughly 7bps by 7am, pulling US 10yr yields up 4bps in the process.  

The volatility during the European hours was really the highlight of the day.  US bond markets went on to hold a narrow range marked by the technical levels in play during yesterday's Yellen press conference.  I'd hoped to see bonds improve in the afternoon based on the logic that Europe was making a negative contribution that would no longer be present after European markets closed.  Instead, US bond markets continued holding the range and even weakening slightly within it.

2017-3-16 chart

At the very least, we can conclude that finite, corrective post-Fed move has run its course and bond markets are back to faring for themselves.  Green vs red probabilities are now more evenly split, but green days would need to quickly get us back below 2.50% in 10yr yields.  Otherwise, we're increasingly at risk of a "technical confirmation" of a breakout (although the technical implications would be even more dire at 2.64%)


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
101-16 : -0-06
Treasuries
10 YR
2.5366 : +0.0326
Pricing as of 3/16/17 5:46PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
1:55PM  :  ALERT ISSUED: Time to Consider Docking The Float Boat
10:15AM  :  ALERT ISSUED: At Weakest Levels Now; Reprice Risk is Next
8:42AM  :  Slight Push Back From "Mixed-to-Stronger" Econ Data

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Sung Kim  :  "new Freddie announcement today, good changes - http://www.freddiemac.com/singlefamily/guide/bulletins/pdf/bll1702.pdf"
Noah Thompson  :  "does anyone have the link to the bulletin from Freddie Mac on the date change to July 6th? I am being conditioned for proof of 5 years by Underwriter on a closing that will happen next month."
Sung Kim  :  "It was such a short joruney"
Matthew Graham  :  "
MBS Live Alert Issued
Time to Consider Docking The Float Boat"