If the only things you could observe about today's bond trading were volumes and "buy vs sell," there were a few moments where things got fairly interesting--especially after 2pm.  That's when the biggest volume and the biggest movement of the day occurred.

While there were several headlines in play at the time, it was Trump's off-the-cuff reference to a surprise economic development bill that would be announced "later on," after sufficiently focusing on "tax cuts and some other things right now," that most clearly rocked bond markets.  

"Rocked" is a relative term, to be sure.  If you wanted to talk up the headline, you could point out that it resulted in a bigger single minute of volume in Treasury Futures than last week's very important CPI numbers.  If you wanted to offer a caveat or two, you could point out that bonds didn't really move much in that minute, and that last week's CPI numbers created vastly greater sustained momentum.  Even so, it was the highlight of the afternoon, and it pushed bonds gradually to their weakest levels of the day.

Refreshingly, 10yr yields held below the important technical ceiling near the 200-day moving average (also the high volume pivot point from the September 27th tax plan announcement sell-off) at 2.314%.  Technical indicators didn't reverse course after Friday's positive shift, but they would threaten to do so if we lose a similar amount of ground tomorrow.  The current showdown is between that 2.314-ish ceiling and a floor of 2.28%, both in terms of 10yr yields..

Fannie 3.5 MBS held above 103-00, and we never saw quite enough weakness for negative reprices among mortgage lenders.


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
103-01 : -0-05
Treasuries
10 YR
2.3052 : +0.0252
Pricing as of 10/16/17 5:00PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
2:17PM  :  ALERT ISSUED: Negative Reprice Risk Increasing After Trump Comments
9:47AM  :  Some Additional Weakness at NYSE Open

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Matthew Graham  :  "crazy... the one-minute following the trump economic bill headline had bigger Treasury futures volumes than the minute following CPI last Friday. Any longer time frame and CPI wins easily. Speaks to the reactive characteristics of black box trading."
Matthew Graham  :  "yep, that too"
Victor Burek  :  "headline printed, black box trading kicked in"
Victor Burek  :  "and i wouldnt classify this as a sell off"
Sung Kim  :  "Paul - the market is a discounting mechanism"
Christopher Stevens  :  "Trump to interview Yellen this week or next then make a descision"
Paul Martin  :  "the point is that economic stimulus plans have historically had a long lag effect before having an impact on the economy...regardless of who proposes...so if the market knows this then why sell off?"
Victor Burek  :  "STANFORD'S TAYLOR IS SAID TO IMPRESS TRUMP FOR FED CHAIR"
Matthew Graham  :  "RTRS - TRUMP SAYS HE PLANS TO PROPOSE AN ECONOMIC DEVELOPMENT BILL IN THE NOT TO DISTANT FUTURE AFTER TAX REFORM"