The resignation of White House Economic Advisor Gary Cohn thew markets a curveball when it was announced after the close of business yesterday.  Currencies (which trade 24 hours a day) and Treasuries futures (which began trading shortly after the news) quickly confirmed that the reaction would be good for bonds and bad for stocks. 

"Good and bad" are relative terms in this case, because none of the movement was on the scale of more dramatic recent movements.  Nonetheless, S&P futures lost a quick 40 points and 10yr yields rallied a quick 4-5bps.  

That was nice while it lasted.

Although bonds did managed to hold most of the gains until the start of the domestic session, the 9:30am NYSE open showed that investors were ready and willing to shrug off the Cohn news.  Stocks and bond yields moved higher together.  Again, we're not talking about massive movements in the bigger picture, but they were notable because they're occurring against a backdrop where Trump's trade tariffs are one step closer to being finalized by the end of the week.

Point being: if the imminent tariff signing isn't enough to keep rates and stocks from moving higher, it's hard to imagine what else could do the trick, short of a very nasty NFP surprise on Friday.

Rates did manage to stage a recovery attempt in the middle of the day thanks to a few big trades that came through the CME complex, but that rebellion was crushed with one swift stroke as soon as 10yr yields hit the 2.85% technical level.  Sellers showed up in force and quickly pushed yields back to the highs of the day by the 3pm close.  They've been drifting sideways in the after hours session, very close to yesterday's latest levels.

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 : +0-00
10 YR
2.8827 : +0.0057
Pricing as of 3/7/18 4:40PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
3:02PM  :  ALERT ISSUED: Obligatory Head-Up If You Had a Positive Reprice
12:35PM  :  Bonds Surge at European Close Following a Few Big Trades
9:52AM  :  ALERT ISSUED: Negative Reprice Risk Increasing For Some Lenders
8:26AM  :  ALERT ISSUED: Bonds Lose Ground After Stronger ADP Numbers

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Matthew Graham  :  "looks like block trades in bonds and eurodollars"
Matthew Graham  :  "smallest day of trading in weeks"
Matthew Graham  :  "If it seems massive, look at 1 month candlestick chart"
Sung Kim  :  "seems like there is massive risk-off move? where is yen? oil down 2.5%"
Matthew Graham  :  "some synergy, but a few big trades hit bonds at 11:51am and got the party started. Not sure what's driving it yet. Stocks are increasingly getting involved now."
Sung Kim  :  "STOCK LEVER!"

Economic Calendar
Time Event Period Actual Forecast Prior
Wednesday, Mar 07
7:00 MBA Purchase Index w/e 238.3 239.4
7:00 Mortgage Refinance Index w/e 1185.7 1168.5
8:15 ADP National Employment (k)* Feb 235.0 195 234
8:30 Labor Costs Revised (%) Q4 +2.5 2.1 2.0
8:30 Productivity Revised (%) Q4 0.0 -0.1 -0.1
8:30 International trade mm $ (bl) Jan -56.6 -55.1 -53.1
Thursday, Mar 08
8:30 Jobless Claims (k) w/e 220 222