Bonds were moderately stronger in the overnight session thanks to European political uncertainty, among other things.  One of those "other things" could simply be the fact that Friday afternoon's weakness was a bit overdone simply because it occurred on a Friday afternoon (traders not wanting to be over-exposed heading into a weekend with or without European political uncertainty).  

Domestic markets really started moving when doubts were cast as to the viability of the Trump's tariff announcement.  Sorry about the passive voice there... To be specific, newswires cited Republican leaders as urging Trump not to advance on the planned tariffs.  Other sources said the GOP wouldn't rule out "potential action" if Trump doesn't back down.  Trump subsequently said he wasn't backing down.

The endgame of the brinksmanship is unclear, but the net effect was the casting of doubt on the tariff plan.  Those doubts helped stocks recover much of their post-Tariff-Announcement weakness from last Thursday.  Unfortunately, bonds experienced the tariff move as a positive event last week, so reversing course meant heading back toward higher rates.

A gigantic, looming corporate bond from CVS applied general pressure to today's weakness.  We knew this deal was coming this week, but today's chatter suggests it will arrive tomorrow and be another $4 billion bigger than initial estimates ($44 bln in total--one of the biggest ever).  Corporate bond issuance tends to push rates higher for reasons discussed in this primer.

MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.
FNMA 3.5
99-19 : -0-06
10 YR
2.8826 : +0.0256
Pricing as of 3/5/18 5:47PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
12:59PM  :  ALERT ISSUED: If You Haven't Seen a Reprice Yet, You Probably Will
11:11AM  :  ALERT ISSUED: Negative Reprices Becoming Likely For Some Lenders
10:45AM  :  ALERT ISSUED: Confused Markets; Bonds Weaker Now; Slight Negative Reprice Risk

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Matthew Graham  :  "
New MBS Huddle Released
2 Reasons Bonds Are Weaker; Lock/Float Thoughts"
Matthew Graham  :  "adds some newswires from congress talking about blocking tariffs. Those mostly line up with stock surge and bond sell-off, then CVS added fuel to the fire."
Matthew Graham  :  "got the huddle with much more info in just a moment, DS"
Daniel Steiner  :  "MG, thanks for your response. I wasn't sure if it was stocks alone or if there was something else. Like a huge CVS bond deal. ha"
Matthew Graham  :  "DS, combination of a risk-on move in concert with stocks and preemptive selling ahead of the massive CVS bond deal that will be out as early as tomorrow. I guess I'd also say part of the sense of abruptness has to do with the fact that we were several bps into stronger territory before it began. In other words, if we woke up this morning to 2.5bp losses in 10s, it wouldn't seem so bad."
Daniel Steiner  :  "MG, Outside of OO why the quick pull back?"