In yesterday's recap, I mentioned that we were likely to see a token bounce on one of the next 3 days, but that it didn't necessarily guarantee further gains.  Today brought said bounce.  

As discussed in the Day Ahead, there are solid historical examples of such bounces turning out to be one or two day affairs that give way to additional upward pressure in rates.  I don't share those facts to assert that such a thing WILL happen this time--merely that it CAN happen any time we see a nice green day punctuating a sea of red.

Today's rally was somewhat underwhelming to boot.  European bonds rallied better than US bonds and the latter was completely unwilling to chase the former's 2nd wind around 10am.  In other words, Treasury yields looked like they were reluctantly pulled lower without necessarily being interested in such things.  

Tomorrow brings the first reading of Q1 GDP, and our first official look at the impact of the tax bill.  Forecasts have consolidated in a 1.8-2.6% range--still fairly wide, and still susceptible to "upside surprises."  In other words, if the headline number is a 3 instead of a 2, it could be pretty damaging.  That said, a headline number that's much lower than the 2.0% median forecast would likely be of some benefit at the moment.  

Away from econ data, bonds will potentially be getting a jump on month-end trading.  They'll also give perhaps some small thought to implications of the North/South Korea meeting as far as geopolitical risk is concerned.  


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
99-01 : +0-10
Treasuries
10 YR
2.9828 : -0.0412
Pricing as of 4/26/18 4:59PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
9:14AM  :  Draghi and Data Not Getting Much Attention; Bonds "Rally" to 2.99%

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Matt Hodges  :  "float with caution"
Matt Hodges  :  "did you read yesterday's MBS Recap? A wise man wrote: We should expect to see a token bounce within the next 3 business days, but there's no guarantee such a thing would last more than a single day at this point. Even then, lenders aren't likely to pass much (if any) love on to rate sheets for a single day of gains."
Victor Burek  :  "me too, my rate sheets showed very little improvement from yesterday"
Tony Garcia  :  "I float at least until tomorrow..."
Ted Rood  :  "Think I'd lock, unless client was geared for higher rates< DF"
Clay Schmeisser  :  "run away"
Dan Frey  :  "60 days out- lock??? What's the consensus?"
Victor Burek  :  "supply is done. hope month end helps now"
Matthew Graham  :  "A-"
Matthew Graham  :  "RTRS - PRIMARY DEALERS TAKE 21.55 PCT OF U.S. 7-YEAR NOTES SALE, DIRECT 12.68 PCT AND INDIRECT 65.77 PCT"
Matthew Graham  :  "RTRS - U.S. 7-YEAR NOTES BID-TO-COVER RATIO 2.56, NON-COMP BIDS $14.10 MLN"
Matthew Graham  :  "RTRS - U.S. SELLS $29 BLN 7-YEAR NOTES AT HIGH YIELD 2.952 PCT, AWARDS 72.28 PCT OF BIDS AT HIGH"