Bond markets are officially looking for inspiration, motivation, or even just something to pass the time.  Today's events didn't seem to do the trick as trading levels drifted aimlessly throughout domestic hours.

That's not to say bonds didn't move, however.  The overnight session saw 10yr yields rise to the 2.36% pivot point to start the day.  From there, they never came close to breaking outside a narrow 2bp range until after the 3pm CME close.  This means all of the morning's economic data and the passage of the House tax bill (just the House, not the Senate) were effectively meaningless as far as bond markets were concerned.

When we see surges in volatility at (and after) 3pm ET, it's a sign that trading conditions are light and that day traders had been making bets on things moving in the opposite direction from the post-3pm move.  In this case, that means day traders were piling into a "flattening" trade (betting on 10yr yields and 2yr yields moving closer together).  When they exited that trade, it either meant 10s would have to rise or 2s would have to fall.  

10yr yields edged up to 2.375% by the end of trading and Fannie 3.5 MBS were back in line with the morning lows (down 5/32nds at 102-20).


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
102-20 : -0-05
Treasuries
10 YR
2.3753 : +0.0403
Pricing as of 11/16/17 5:16PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
3:35PM  :  ALERT ISSUED: Negative Reprice Risk Increasing
8:56AM  :  Little-Changed in Weaker Territory After Econ Data

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Brian McFarlane  :  "If you are a street originator, and you are happy that Cordray is leaving and the CFPB is being declawed, you may want to reconsider your glee."

Economic Calendar
Time Event Period Actual Forecast Prior
Thursday, Nov 16
8:30 Import prices mm (%)* Oct +0.2 0.4 0.7
8:30 Philly Fed Business Index * Nov 22.7 25.0 27.9
8:30 Export prices mm (%)* Oct 0.0 0.4 0.8
8:30 Jobless Claims (k) w/e 249 235 239
9:15 Capacity Utilization (%) Oct 77.0 76.3 76.0
9:15 Industrial Production (%) Oct +0.9 0.5 0.3
10:00 NAHB housing market indx Nov 70 68 68