Yesterday's recap was titled "Surprising (or Not?) Absence of Volatility."  Fool me once, shame on me.  Fool me twice... won't be fooled again.

The UK election was billed as a big-ticket event for traders, but in hindsight, it's clear that there were no unified trading themes corresponding to various outcomes, save perhaps for an outright upset for the Prime Minister's seat.  Headlines convey the shocking surprise of a parliamentary shake-up, however.  So what's up with that and why are bonds ending the day nearly unchanged?

Simply put, Theresa May wanted her party to have a parliamentary majority.  Pollsters thought she had a decent chance of getting that, but she didn't.  This makes Brexit-related legislation tougher and slower.  Bonds thrive on fast/aggressive Brexit.  Hence, the election upset was leaned-on as a reason for this morning's bond market weakness.  

That's a possibility.  It's also possible that we simply aren't walking away from the current week with major political surprises on the domestic front.  Combine that with the fact that next week is an absolute zoo in terms of scheduled data and events and today's closing levels offend absolutely no one.   Yes, we're rising from the 2.15-2.17% gap and that's a bit disconcerting, but it's still anyone's game next 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
103-07 : -0-01
Treasuries
10 YR
2.2023 : +0.0083
Pricing as of 6/9/17 5:19PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
9:35AM  :  Bonds Giving Back "Protection Money"

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Matt Hodges  :  "bond auctions can be helpful either because they are well subscribed, esp. with foreign/indirects and/or because of exhausting bond supply - relief rally."
John Tassios  :  "FED will definitely hike. but FED may surprise with dovish stmt on Wed and longr end rallies"
Matthew Graham  :  "all that and more in the huddle coming up shortly. MH hit the high points though. I might replace issuance or add to it with "econ data.""
Matt Hodges  :  "bond issuances on mon/tues + Fed decision Wed"
Peter Lassig II  :  "MG: What things are on your radar for the next few days and weeks that could potentially be market movers?"