Between the overnight session and domestic trading hours, the following voices tried to get inside the head of bond markets:

  • A North Korean missile launch asked bonds to rally from "safe haven" demand.  They sorta did at first.
  • Hawkish comments from a British central banker asked global bond yields to move higher.  US Treasuries sorta complied
  • Weaker Retail Sales data opened the door for bonds to rally in the morning.  They began to walk through.
  • The 9:30am NYSE tradeflows and stronger inflation expectations in the 10am Sentiment data said "not so fast" to the bond rally.  Bonds heeded the warning
  • And finally, an ongoing stock rally provided justification for bonds to weaken all day long, but they did nothing of the sort.

Despite all of the above, 10yr yields hit the 3pm closing levels today at virtually the same closing levels as yesterday.  Each motivation (except the afternoon stock rally) was paid a token amount of attention, but was never given permission to stand out above the others.  Ultimately bonds wanted to be sideways today.  The only reason for red on trade screens is yesterday's late day rally that set strong "previous day" closing levels.  It's really the 3pm-3pm closing levels that matter, and as stated, those are flat.

In short, the end of this week's correction to last week's rally has been confirmed.  We now wait for the next dose of inspiration--possibly from next Wednesday's FOMC festivities.  Those will include not only the policy announcement, but also the updated forecasts ("dots") as well as a Yellen press conference. 

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
103-09 : -0-03
10 YR
2.2023 : +0.0033
Pricing as of 9/15/17 5:08PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
10:30AM  :  ALERT ISSUED: Negative Reprice Risk Increasing
8:44AM  :  Slightly Stronger after Retail Sales Data

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Matthew Graham  :  "y'like dags?"
Timothy Baron  :  "I request Mickey from the movie Snatch."
Matthew Graham  :  "It's been a long time since I've done any accents on video or webinar, so if you like my "stuffy British central banker" in today's video, I'll take requests for future accents. (Funny because I think the guy is actually Belgian, but that's outside my range as a voice actor currently)"
John Tassios  :  "esp after BOE hawkish stmt"
John Tassios  :  "i'll take it too, MG"
Matthew Graham  :  "Perhaps a bit. I wouldn't put much stock in retail sales though. I think the bigger story is that we're flat for 2 days after a nasty little correction. I'll take it."
Sergio Szyrko  :  "is anyone else surprised we are not more green today, given a couple world events and the weak retail sales?"
Matthew Graham  :  "worse than a late 90's Shaq free throw at least"
Matthew Graham  :  "next week, under 15% chance, generously"
Louie Colatriano  :  "MG, what is your current view on the probability of a rate hike next week?"