After 5 days of gains for longer-term bonds (we'll lump 10yr Treasuries and the MBS coupons that matter to rate sheets into that category), today finally turned red.  How much to read into that weakness is a matter of debate. 

On one hand, it's an exceptionally slow week where we've generally seen very low volumes and a startling absence of market-moving motivations.  On the other hand, 10yr yields have attempted to break below 2.30+ for 2 straight days and been unable to do so.  

There's something for bears and bulls in today's weakness.  Bears can stay focused on that double bounce at 2.30 and worry about a turning point for the recent rally.  That's not a bad strategy, but it could turn out to be a bit too jumpy given the absence of volume and motivation behind the weakness.

Bulls can point to the fact that this afternoon's high yields never even crested yesterday's high yields.  That won't look like it's the case on the chart because yesterday's high yields occurred in the overnight session.  Bulls might also point out that the 10yr Treasury auction was reasonably well-received despite yields being at their lowest levels (generally) in 3 weeks.

The bottom line is that a perfect utopia of ongoing improvements can't be guaranteed, but that the threats to that utopia seen today aren't threatening enough to suggest abandoning hope.  Shorter term technicals are modestly affected by this weakness, but longer-term technicals are still intact--pointing in a friendly direction for now.


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
102-32 : -0-03
Treasuries
10 YR
2.3289 : +0.0219
Pricing as of 11/8/17 4:17PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
3:21PM  :  ALERT ISSUED: Weakest Levels of The Day After the 3pm Close
1:07PM  :  "A-" 10yr Auction May Help Stem The Losses
12:16PM  :  MBS at Weakest levels; Reprice Risk Increasing
10:13AM  :  Unchanged, Avoiding Yesterday's Best Levels For Now

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Sung Kim  :  "is everyone outside screaming? MBS market must be closed"
Joel Marks  :  "Today begs the age-old question: What if you had a good 10 year auction and nobody cared?"
Matthew Graham  :  "RTRS - U.S. 10-YEAR NOTES BID-TO-COVER RATIO 2.48, NON-COMP BIDS $31.15 MLN"
Matthew Graham  :  "RTRS - U.S. SELLS $23 BLN 10-YEAR NOTES AT HIGH YIELD 2.314 PCT, AWARDS 94.01 PCT OF BIDS AT HIGH"
Matthew Graham  :  "10yr auction stats. This is a "refunding" vs a "reopening." They tend to have weaker stats. Average bid-to-cover 2.36. Average yield +8bps over the 1pm When-Issued (currently 2.319), Indirects 63.6%. Decoder ring for this jargon: Treasury Auction Jargon, Definition, and Significance "
Matthew Graham  :  "Or let me put it this way: there's not enough volume and movement associated with the spike to say definitively that it lines up with those newswires. We also have the end of European bond trading 20 minutes ago and a traditional time frame for a pre-auction concession during this hour."
Matthew Graham  :  "No, I think the spike is incidental"
Oliver Orlicki  :  "Is that the spike?"
Matthew Graham  :  "Banjo 2: - U.S. SENATE REPUBLICAN TAX BILL STILL ON TRACK FOR THURSDAY RELEASE – CONGRESSIONAL SOURCE"
Matthew Graham  :  "Banjo 1: - U.S. SENATE WILL NOT RELEASE ITS VERSION OF TAX REFORM BILL ON THURSDAY -AXIOS, CITING SENIOR REPUBLICAN AIDE"