There were several exciting lead changes in today's game for bond markets.  The early inning were devoted to parsing the European Central Bank's (ECB) announcement and subsequent press conference from ECB President Draghi.  In a nutshell, bonds liked the announcement at 7:45am but didn't much care for Draghi's comments (which began at 8:30am).  

After hitting the highest intraday yields since mid-2014, bond buyers jumped in the market and helped stop the bleeding.  This was somewhat reassuring actually, as we clearly witnessed "value buying" among traders who'd been sitting on their hands until yields got high enough.  It also means that 5 out of the past 5 trading days have seen 10yr yields hit intraday highs within 1bp of 2.666%. 

The technical bounce created some positive momentum heading into the exceptionally strong 7yr Treasury auction.  That strength kept the positive momentum intact all the way through the close, ultimately bringing 10yr yields to 2.615% before they bounced.  Incidentally, 2.615% is an important short-term floor that we'd like to see broken before getting more optimistic about a longer-lasting bounce.

MBS kept pace fairly well with Treasuries.  Fannie 3.5 coupons gained 5/32nds of a point to end at 101-17 (just over 101.5).  


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
101-17 : +0-05
Treasuries
10 YR
2.6244 : -0.0296
Pricing as of 1/25/18 5:22PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
1:09PM  :  Bonds Hit Best Levels After Strong 7yr Auction
10:59AM  :  Buyers Step In. Bonds Recovering For Now
10:00AM  :  ALERT ISSUED: Negative Reprices Becoming More Likely
9:15AM  :  ALERT ISSUED: Negative Reprice Risk Already a Possibility For a Few Lenders
8:55AM  :  Bonds Already Under Pressure as Draghi Press Conference Begins

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Matthew Graham  :  "At least an "A""
Matthew Graham  :  "RTRS - PRIMARY DEALERS TAKE 11.7 PCT OF U.S. 7-YEAR NOTES SALE, DIRECT 10.19 PCT AND INDIRECT 78.11 PCT"
Matthew Graham  :  "RTRS - U.S. 7-YEAR NOTES BID-TO-COVER RATIO 2.73, NON-COMP BIDS $17.61 MLN"
Matthew Graham  :  "RTRS - U.S. SELLS $28 BLN 7-YEAR NOTES AT HIGH YIELD 2.565 PCT, AWARDS 26.08 PCT OF BIDS AT HIGH"