I hate to say anything bad about bond market gains.  Bond market gains are among a few of my favorite things, after all!  I also hope I'm wrong in thinking today's rally was "nice" enough to be questioned.  I spelled out the reasons for this in detail in today's MBS Live updates and the Huddle (MBS Live members be sure you're signed up to receive the Huddle at this link), which is a daily video update with bullet points on market movers, technical levels, and lock/float guidance.

In a nutshell, I'm wary about today's gains for the following reasons:

  • they occurred in lower volume
  • they continue to be driven by big tradeflows as opposed to big news/econ data
  • big news/econ data was generally passed over, as if markets were trying to get somewhere ahead of NFP
  • NFP is widely expected to be weaker than expected (hope that makes sense...)
  • the rally stopped out at the exact technical levels that we've been eyeing as a line in the sand, beyond which we'd consider bonds to have made a positive shift (2.21-2.22% in 10yr yields).

All of the above raises the risk that bond traders are in position for a weak NFP number and that they're ready to change things up and do some selling if the opportunity presents itself tomorrow.

MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.
FNMA 3.5
103-10 : +0-07
10 YR
2.2194 : -0.0426
Pricing as of 8/3/17 7:19PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
1:16PM  :  Bittersweet Gains Bring Bonds to Best Levels
10:14AM  :  ISM Services Data Weak Enough to Help Bonds

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Nathan Miller  :  "me too, just needed an .125 for a couple new locks...grrr"
B C  :  "i figured today would be better"
B C  :  "me too"
Nathan Miller  :  "same as yest here"
B C  :  "hows everyones rate sheets today? better than yesterday i can assume?"
Gilbert Denizard  :  "lovely shade of green today"