Take market analysis with a grain of salt today.  To a much greater extent than yesterday, market-watchers would have to dig to connect the dots between news/events and market movement.  Volumes were lighter and the shuffling of trading positions looks to have played as big a role as anything else.  

With that out of the way, let's connect the dots as best we can.  Right out of the gate, a headline from an unnamed ECB official (saying a tapering announcement was likely at the September meeting) pushed bond yields noticeably higher.  This occurred just after 7am and resulted in bonds opening weaker for the domestic session.

8:30am economic data wasn't very interesting as far as traders were concerned.  The data also didn't happen to fall very far from forecasts.  The next noticeable move happened during Yellen's Senate testimony.  Apart from a slightly more hawkish tone this time around, Yellen  made a point to go into greater detail on WHY low inflation could be transitory.  

She also said she expects long-term rates to rise as the Fed allows its portfolio to run-off.  While this is a fairly logical conclusion, it prompted a classic "QE-off" move (stock prices lower, bond yields higher) in financial markets.  Stocks recovered in short order, but bonds continued trading near the day's weakest levels, ultimately erasing a small portion of the gains after the 30yr bond auction.


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
102-19 : -0-03
Treasuries
10 YR
2.3480 : +0.0210
Pricing as of 7/13/17 6:15PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
1:06PM  :  ALERT ISSUED: Bonds at Weakest Levels After Auction
12:58PM  :  30yr Auction Preview
10:26AM  :  ALERT ISSUED: Bonds Weakening on Yellen Comments
8:26AM  :  Bonds Weaker Ahead of Data on ECB Headline

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Matthew Graham  :  "Grade would be C-, especially considering we sold-off all morning."
Mike Christensen  :  "what is grade Matt? B-"
Jeff Anderson  :  "PSR can kick in at any time now."
Matthew Graham  :  "RTRS - PRIMARY DEALERS TAKE 31.94 PCT OF U.S. 29-YEAR 10-MONTH BONDS SALE, DIRECT 6.38 PCT AND INDIRECT 61.68 PCT"
Matthew Graham  :  "RTRS - U.S. 29-YEAR 10-MONTH BOND BID-TO-COVER RATIO 2.31, NON-COMP BIDS $4.04 MLN"
Matthew Graham  :  "RTRS - U.S. SELLS $12 BLN 29-YEAR 10-MONTH BONDS AT HIGH YIELD 2.936 PCT, AWARDS 30.56 PCT OF BIDS AT HIGH"

Economic Calendar
Time Event Period Actual Forecast Prior
Thursday, Jul 13
8:30 Core Producer Prices YY (%)* Jun +1.9 2.0 2.1
8:30 Producer Prices (%) Jun +0.1 0.0 0.0
8:30 Initial Jobless Claims (k) w/e 247 245 248
8:30 Continued jobless claims (ml) w/e 1.945 1.950 1.956
13:00 30-Yr Bond Auction (bl)* 12
Friday, Jul 14
8:30 Retail sales mm (%)* Jun 0.1 -0.3
8:30 Core CPI Year/Year (%)* Jun 1.7 1.7
8:30 CPI mm, sa (%)* Jun 0.1 -0.1
9:15 Capacity Utilization (%) Jun 76.7 76.6
9:15 Industrial Production (%)* Jun 0.3 0.0
10:00 Business inventories mm (% ) May 0.3 -0.2
10:00 Consumer Sentiment 1Yr Inf Prelim (%) Jul 2.6