Bonds rallied today for the first time all week, and fairly well at that!  10yr yields fell more than 5bps and Fannie 3.5 MBS rose nearly 3/8ths of a point.  Not much to be mad about there, right?

Indeed, there's nothing to be mad about, but there are all sorts of reasons to remain cautious.  The rally was driven by a combination of European political drama and short-covering in US bond markets.  Here's an external link that does a better job than I can of explaining the Eurodrama quickly.  And here's a homegrown link the goes into greater detail on short-covering.

The day's best gains were seen during the 2nd half of the European session (which effectively ends at noon ET), but short-covering kept the positive trend intact through the domestic close.  To reiterate what I said earlier in the day: European political drama and short-covering don't add up to solid evidence for a meaningful bounce in rates.  That doesn't mean we can't get such a bounce--simply that today is no indication of that in and of itself.


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 4.0
101-09 : +0-11
Treasuries
10 YR
3.0596 : -0.0494
Pricing as of 5/18/18 4:42PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
10:49AM  :  Short-Covering and European Influences Helping Bonds

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Matthew Graham  :  "In my market, the rate spike seen so far in May means that something that's been appreciating at a rate of $30-40k per year now costs $53/mo more."
Alan Craft  :  "Hopefully that serves to cool off prices. Things were getting out of hand"
Mike Drews  :  "so dramatic"
jamie Fitz-Gerald  :  "The Era of Low Mortgage Rates Is Over"
Timothy Baron  :  "Lock desks likely being conservative on a Friday with no confirmation yet.."
Mike Christensen  :  ".100 from yesterday is all. No repost today"
Timothy Baron  :  "Y'all seeing much pricing improvement today?"
Timothy Baron  :  "Yeah I sort of parroted MG."
Peter Lassig II  :  "That is MG's take too (from the day ahead)."
Timothy Baron  :  "The green feels good today, but it's probably just a pause on the march higher."
Nathan Miller  :  "we use .25 17' .24 16'"
Sung Kim  :  "what is mileage add back for 2016 and 2017?"
Jason Anker  :  "3.25 comming"
Jason Anker  :  "3.06 = NOT GOOD AT ALL"
Nathan Miller  :  "I'd def like more than the .125 I got this a.m."
Ted Rood  :  "2 hour chart looks OK too."
Mike Drews  :  "2 day chart looks good!"