Bonds ended in the green today, albeit just barely.  Normally that wouldn't be a bad thing, but today's example leaves a bit to be desired.

I should start off by saying that today could have been much worse than it was.  Indeed, any time we can avoid ending in the red these days is an opportunity to count blessings.  

With those disclaimers out of the way, I'll get back to the lament.  At the simplest level, generally negative trends generally continued.  Case in point:

2018-1-22 close

In other words, we may have technically been in positive territory versus the 5pm levels from Friday, but we can all agree those 5pm levels were ridiculously unpleasant.   

The mid-day turn around occurred 

A) right on a pivot point with Thursday's highs

B) immediately following the European close,and

C) immediately following confirmation that Congress had cobbled together a passable stop-gap bill to end the shut-down.

In other words, it wasn't necessarily all about the shutdown bill, but even then, the amount of movement we saw wasn't much to write home about in the bigger picture.  While I don't like the shutdown as a first-line explanation for big moves, I'm fine with giving it some credit for today's reversal.  Beyond this, a draft of the new infrastructure spending plan was leaked and/or circulating around the same time.  This too, could have added to the pressure.

However we account for it, the net effect is bad.  Bonds hit their weakest 3pm close since early 2014 and have yet to mount any sort of convincing counterattack.  Until that happens, stay safe and defensive  when it comes to lock/float strategy.  Pretty simple. 


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
101-09 : +0-01
Treasuries
10 YR
2.6556 : +0.0166
Pricing as of 1/22/18 5:30PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
2:49PM  :  ALERT ISSUED: Potentially Compounding The Weakness: Infrastructure Plan
1:30PM  :  ALERT ISSUED: Negative Reprices Becoming More Possible
1:01PM  :  ALERT ISSUED: Negative Reprice Risk Considerations
10:00AM  :  So Far, So "OK" For Bonds

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Matthew Graham  :  "if I remember, I'll go over this in the video I'm recording currently"
Matthew Graham  :  "2.75 goes back to mid-2013. It saw the biggest ceiling bounces (3 of them) by the end of 2013 and then served as a last little pivot point as rates finally began to move lower in 2014."
Christopher Stevens  :  "What is the significance of 2.75 that you used on the Huddle Friday?"
Christopher Stevens  :  "MG- why is 2.75 considered a ceiling? wasn't 2.72 an intraday high back in April 2014?"
Christopher Stevens  :  "if shutdown didn't matter why should the end of the shutdown"
Matthew Graham  :  "reopen is already baked in"
William Hansen  :  "reopen=red ?"
Matthew Graham  :  "RTRS - WHITE HOUSE SAYS EXPECTS TRUMP TO SIGN BILL ENDING GOVERNMENT SHUTDOWN LATE MONDAY AFTERNOON OR EARLY EVENING"
Matthew Graham  :  "RTRS - U.S. HOUSE REPUBLICAN LEADERS EXPECT VOTES ON FUNDING BILL TO REOPEN U.S. GOVERNMENT LATER ON MONDAY -STATEMENT"
Matthew Graham  :  "RTRS - SCHUMER SAYS WILL VOTE TODAY TO REOPEN U.S. GOVERNMENT"
Matthew Graham  :  "RTRS - U.S. SENATE DEMOCRATIC LEADER SCHUMER SAYS HAS COME TO AN ARRANGEMENT WITH REPUBLICAN LEADER MCCONNELL ON FUNDING BILL"
Jason Anker  :  "imagine how far ahead he'd be if he was an MBS live subscriber"