Bond markets began the day holding impressively sideways.  Why impressive?  Because there was a small laundry list of potential reasons for weakness.  This included: 

  • Democratic congressional leaders announcing they were prepared to vote for Harvey aid and a 3-month debt limit increase in order to provide time to negotiate on DACA, government funding, and health care.
  • The Labor Department released benchmark revisions to nonfarm payrolls that would raise the total job count by 95k from March 2016 through March 2017 
  • The Bank of Canada unexpectedly raised rates
  • a good amount of corporate bond issuance 
  • no new rate-friendly drama regarding North Korea
  • Reasonably strong ISM Non-Manufacturing data
  • A shift toward short positions in a major survey of bond traders (short positions = higher rates)

Ultimately, it was the debt ceiling news that ended up doing the damage, but not until Trump voiced his support (via "sources briefed on the matter").   That news coincided with the spike in bond yields just before 1pm, which ultimately undid about half of yesterday's gains.

2017-9-6 close

MBS lost a similar proportion of their gains from yesterday, but because they lagged the Treasury rally, that meant a mere eighth of a point for Fannie 3.5 coupons.  Because of that, not every lender repriced for the worse, thus leaving the best rates of the year intact through the close.  


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
103-22 : -0-04
Treasuries
10 YR
2.1046 : +0.0346
Pricing as of 9/6/17 4:55PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
2:08PM  :  ALERT ISSUED: Negative Reprices Becoming More Likely
1:06PM  :  ALERT ISSUED: Negative Reprice Risk Increasing on Debt Ceiling Headlines
10:32AM  :  Bonds Holding Ground Nicely Considering Data and Other Factors

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Ted Rood  :  "Ha! I locked two before the worsen, thanks MBS Live!"
Nathan Miller  :  "I’m just a .25-pt better than Friday, not a whole lot to take away"
Timothy Baron  :  "Great day to lock. Hurry before gains are taken away!"
Matthew Graham  :  "and still the case at some big name lenders"
Matthew Graham  :  "definitely the best levels of the year this morning"
Matt Hodges  :  "it's been a good day to lock, MG. lows of the year, right?"
Matthew Graham  :  "RTRS - HOUSE AND SENATE DEMOCRATIC LEADERS SAY "BOTH SIDES HAVE EVERY INTENTION OF AVOIDING DEFAULT IN DECEMBER""
Matthew Graham  :  "RTRS - HOUSE AND SENATE DEMOCRATIC LEADERS SAY PRESIDENT, CONGRESSIONAL LEADERSHIP AGREED TO PASS HARVEY AID AND AN INCREASE IN DEBT LIMIT, GOVERNMENT FUNDING TO DEC. 15 ALL TOGETHER"
Matthew Graham  :  "RTRS - TRUMP URGES CONGRESSIONAL LEADERS TO FIND QUICK BIPARTISAN AGREEMENT ON DEBT LIMIT, FY2018 GOV'T SPENDING -SOURCE BRIEFED ON TRUMP-LAWMAKERS MEETING"