When you pay the sort of price we paid last week (in terms of rates surging to 7-year highs), you expect to get something reasonably nice in return.  This, then, is our recompense.  In terms of ground covered, it was the best week we've had since April 2017.  

An unresolved question remains: would it have happened without Italian political drama?  I know the answer.

Yes, we still would have rallied, but no, we probably wouldn't have rallied at such a fast pace.  Domestic bond markets and even German Bunds RESISTED the Italian implication last week and only really got with the program as things got more serious on Wednesday.

The additional safe-haven buying was the last thing bond sellers wanted to see a few short days after pushing yields to long-term highs.  It meant a big accumulation of "shorts" (bets on rates moving higher) was at risk of snowballing into a short squeezeThat's essentially what happened, and it's why bonds kept on rolling at the same linear pace throughout the morning, seemingly paying no attention to economic data or news headlines.

Will it last?  No.  Will it last through next week?  We'll see, staring on Tuesday!

MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.
FNMA 4.0
101-29 : +0-08
10 YR
2.9313 : -0.0497
Pricing as of 5/25/18 5:21PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
10:59AM  :  Methodical Rally Rolls Right Past Calendar Events