Bond markets are matching their best 3-day performance in over a month with today's stronger closing levels.  Unlike the previous examples, the current 3 days have resulted in the biggest move lower in yields from the previous day's highs.  Pretty confusing sentence... let me explain.  

Friday's high yields were just over 2.40% in 10yr Treasuries and today closed at 2.32%--an 8bp improvement.  The previous corrections were good for a 7bp and 1.5bp improvement using the same measurement rules.

The frustrating thing is that we have no idea whether or not to be excited about that until we see tomorrow morning's CPI data.  It has been and continues to be this week's data highlight.

As for today, the PPI data did a small amount of damage in the morning as the "core" indices (which strip out food and energy prices) were stronger than expected.  Bonds recovered fairly quickly and were soon reacting to a fairly strong 30yr bond auction as well as headlines that suggested a small earthquake in North Korea may have been a nuclear missile test.

Despite the improvement, 10yr yields continue avoiding a break below the 200-day moving average that's served as a floor in October, and even then, they haven't come remotely close to moving outside last week's range for better or worse.  


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
102-31 : +0-05
Treasuries
10 YR
2.3230 : +0.0000
Pricing as of 10/12/17 8:03PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
1:47PM  :  Bonds Improving After Good 30yr Auction
8:44AM  :  Bonds Slightly Weaker After PPI Data

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Hugh W. Page  :  "Inflation data if it comes in hot tomorrow could hurt us maybe?"
Dan Clifton  :  "I'm locked up. Not floating into tomorrow. My rates are actually 20-30bps improved on pricing from earlier in the week, so any time you can lock clients in better than quotes you gave and they were happy with, well GUTFLOP"
Michael Gillani  :  "I'm not sure there's much gains to lock in all honesty. Although we've seen modest gains in MBS over the past 2-3 sessions, rate sheets are almost stagnant."
Dan Draitser  :  "Who's locking in these gains?"
Christopher Stevens  :  "Carson: Government considering ending use of False Claims Act against FHA lenders"
Victor Burek  :  "seems solid"
Matthew Graham  :  "RTRS - U.S. SELLS $12 BLN 29-YEAR 10-MONTH BONDS AT HIGH YIELD 2.870 PCT, AWARDS 23.37 PCT OF BIDS AT HIGH"
Matthew Graham  :  "RTRS - BULLARD: RAISING RATES AS INFLATION FALLS RISKS POLICY MISTAKE THAT COULD PUSH INFLATION LOWER OR, IN THE EXTREME, MAKE RECESSION MORE LIKELY"