Today's bond market rally masqueraded as a "tradeflow move" surrounding the NYSE Open.  We know that ETF trading has been increasingly important for bonds over the past year, and we can often see this in the form of sharper movement surrounding the 9:30am time frame.  At first glance, that seemed to be the only game in town this morning.  

While tradeflows were generally favoring bonds at the expense of stocks, the biggest surges in volume lined up with specific headlines concerning North Korea's nuclear threats.  Shortly after the NYSE open, a newswire hit suggesting that North Korea vowed to "wipe out" South Korea and the U.S. with a preemptive nuclear strike.   This is nothing new from North Korea, and as such, it didn't elicit an extreme response from markets.  In fact, until that point it wasn't clearly in the running for "market mover of the day."

It wasn't until a White House press briefing that markets clearly responded.  Sean Spicer said "North Korea is looking for trouble. If China decides to help, that would be great. If not, we will solve the problem without them! U.S.A.," and that the US wouldn't telegraph its moves in advance.  With that, stocks and bonds put in their highest volumes of the day and their most overt  move into "risk-off" territory.  All of the above was confirmed by a break below 110.00 in Yen/$--a level we'd been watching as indicative of a shift in the risk-off trade since last week.


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
102-21 : +0-12
Treasuries
10 YR
2.2980 : -0.0630
Pricing as of 4/11/17 5:27PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
1:19PM  :  Nice Show of Support So Far
1:05PM  :  ALERT ISSUED: Slight Increase in Negative Reprice Risk After Auction
12:56PM  :  Quick 10yr Auction Preview
11:00AM  :  Why So Serious? (The Stock Selling, That Is...)
9:58AM  :  What's Up With The MBS Chart Today?

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Sung Kim  :  "dumb money looks at that and dumb money is always wrong"
Sung Kim  :  "moving averages probably better for contrarian bets"
Matthew Graham  :  "As much as we want there to be a way to predict the future for markets, there just isn't. You have to bring fundamentals and bit of luck into the picture if you want to beat the odds"
Sung Kim  :  "and there's the cold water..."
Matthew Graham  :  "notably, it happened in May 2013. Bad time to get bullish"
Matthew Graham  :  "it's not common"
Timothy Baron  :  "I just don't think I've seen the before. Look at the 3 month chart."
Matthew Graham  :  "just confirmation of what we already know: bonds are no longer selling off like they were. Sadly, there are plenty of examples of "crosses" that end up sending false positive signals."
Timothy Baron  :  "Yeah, something like that?"
Sung Kim  :  "death cross?????"
Matthew Graham  :  "like 50 crossing below 100?"
Timothy Baron  :  "25, 50, and 100 day SMA Any significance?"
Sung Kim  :  "Yen broke 110?"
Sung Kim  :  "wonder if stock selling has to do with N Korea"