It's beginning to look and sound a lot like the Springtime when bond analysts were making their calls for the year's highest 10yr yields.  Guesses ranged from 3-4% with the majority somewhere in the lower half of that range.  The trigger back then was a move up toward--and eventually through--the 3% level.  It's been the same story over the past few trading sessions with today finally seeing a break above 3%.

Japanese bond market weakness drove the initial move higher in the overnight session, but to be very clear, Treasuries continue to have their own reasons to sell.   That was made apparent at 8:30am, when the refunding announcement (Treasury's statement about upcoming borrowing plans) specified a neutral outlook for the weighted average maturity. 

In other words, whereas Treasury had been ramping up shorter-term debt issuance (which doesn't hurt mortgage rates or 10yr yields much), they now plan to issue debt more evenly across the curve.  This put immediate pressure on the long end of the yield curve.  Fancy words aside, 30yr yields rose more than 4bps today while 2yr yields were close to unchanged.

Away from the refunding announcement and the initial momentum related to Japan, there wasn't much else to write home about today.  The ADP employment data left bonds completely unchanged between 8:15 and 8:29am.  The 10am ISM data didn't do any better.  Even the Fed announcement fell on deaf ears, but in defense of those ears, the Fed didn't really say anything new compared to the last announcement.


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
101-13 : -0-06
Treasuries
10 YR
3.0064 : +0.0424
Pricing as of 8/1/18 4:50PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
2:13PM  :  Fed Announcement Uneventful
9:39AM  :  ALERT ISSUED: Reprice Risk Increasing For Some Lenders
8:28AM  :  Overnight Weakness Briefly Extends After ADP

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
John Tassios  :  "boring FED stmt, MG - not seeing much change in the infl stmt from prev stmt"
Matthew Graham  :  "FED REPEATS EXPECTS FURTHER GRADUAL INCREASES IN FED FUNDS RATE WILL BE CONSISTENT WITH SUSTAINED ECONOMIC EXPANSION, STRONG JOBS MARKET AND INFLATION OBJECTIVE"
Matthew Graham  :  "FED SAYS ECONOMIC ACTIVITY HAS BEEN RISING AT A STRONG RATE; JOB GAINS HAVE BEEN STRONG IN RECENT MONTHS AND UNEMPLOYMENT RATE HAS STAYED LOW"
Matthew Graham  :  "FED MAINTAINS TARGET INTEREST RATE AT 1.75-2.00 PCT"
Matthew Graham  :  "RTRS - U.S. ECONOMY SEEN GROWING AT 5.0 PCT IN Q3 VS 4.7 PCT ESTIMATE ON JULY 31 - ATLANTA FED'S GDPNOW MODEL"

Economic Calendar
Time Event Period Actual Forecast Prior
Wednesday, Aug 01
7:00 MBA Purchase Index w/e 237.9 245.5
7:00 Mortgage Refinance Index w/e 971.3 988.6
8:15 ADP National Employment (k)* Jul 219.0 185 177
10:00 ISM Manufacturing PMI * Jul 58.1 59.5 60.2
10:00 ISM Mfg Prices Paid * Jul 73.2 75.8 76.8
10:00 Construction spending (%)* Jun -1.1 0.3 0.4
14:00 FOMC rate decision (%)* N/A 1.875 1.875 1.875
Thursday, Aug 02
8:30 Jobless Claims (k) w/e 220 217
9:45 ISM-New York index * Jul 785.0
10:00 Factory orders mm (%) Jun 0.7 0.4