This week continues to be all about Tuesday for bond markets.  That was the day with the rather violent, inexplicable sell-off that took yields from 2.25 to 2.34 approximately.  Even with econ data, a Treasury auction and the Fed announcement yesterday, yields remained well inside Tuesday's range.  Today was narrower still--especially during domestic hours where 10yr yields held between 2.3 and 2.33% as opposed to yesterday's 2.28-2.34% domestic session range.

These "inside days," as they're called, speak either to a lack of conviction or simply to a consolidation.  Either way, we're waiting for a break outside Tuesday's levels before drawing any conclusions.  Arguments can be made for both camps, but caution is warranted considering the big surges in volume have accompanied movement toward higher rates over the past 3 days.  

Today, specifically, there was little by way of reaction to the stronger Durable Goods data.  That's net-positive for bonds, but there was a counterpoint as bonds failed to react to a big selling-spree in stocks heading into the 1pm hour.  It's not that we should expect bonds to rejoice every time stocks move lower, but this was a big, broad-based move that typically would have seen bonds come along for the "risk-off" ride unless bonds had something else on their minds.


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
102-25 : -0-03
Treasuries
10 YR
2.3175 : +0.0355
Pricing as of 7/27/17 4:41PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
1:57PM  :  Big Corporate Bond Deal Doing Some Damage
10:28AM  :  ALERT ISSUED: Teetering on Edge of Negative Reprice Risk for Some Lenders
8:43AM  :  Modest Overnight Weakness Intact After Econ Data

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Matthew Graham  :  "B. All the stats were right in line with averages"
Matthew Graham  :  "RTRS - U.S. SELLS $28 BLN 7-YEAR NOTES AT HIGH YIELD 2.126 PCT, AWARDS 36.46 PCT OF BIDS AT HIGH"
Christopher Stevens  :  "CR- about an 1/8 better in price from yesterday morning. For those that re-priced late yesterday the pricing is very similar (3-5 bps worse)"
Caroline Roy  :  "how's pricing comparing to yesterday for you guys?"
Dominick Cordone  :  "2nd'd"
Steve Chizmadia  :  "It would be a welcome change if they adopt this rule though"
Steve Chizmadia  :  "As far as I'm aware it needs to be purchase money"
Daniel A. Kramer  :  "question, has Fannie changed the seasoning guidelines for paying of a non-purchase 2nd loan, in a refi, where the current HELOC was opened and last drawn on over a year ago? can this now be done rate and term or still has to be a cahs out?"
Ted Rood  :  "dammit, there goes my lawsuit"
Kurt Stahl  :  "Notes I see typically say "if the index is no longer available, the Note Holder will choose a new index that is based upon comparable information. The Note Holder will give me notice of this choice.""
Andrew Haynes  :  "and if its not in favor of the borrower, the lender could be sued or worst yet class action"
Ted Rood  :  "Unless there's verbiage in current LIBOR notes stating an alternative index, seems like a guaranteed class action lawsuit when lenders start using alternative indexes."
Matthew Graham  :  "nope. Pretty boring topic, in my opinion. There will always be several great ways to get a baseline on overnight lending rates. LIBOR was just force of habit for the industry. ARM share is small too. Hiccups for existing loans with recasts? Only in terms of annoyance, but not in terms of material changes in cost to consumers."
Andrew Haynes  :  "glad they put the date out 4 years from now, so lenders can start to change their indicies"
Andrew Haynes  :  "right TR?"
Ted Rood  :  "So, if Libor ends, what happens to all ARMs in place with Libor as index??"
Andrew Haynes  :  "any thoughts on this MG?"
Andrew Haynes  :  "everyone hear about LIBOR this morning?"