Headlines continue overstating the connection between US market movements and the financial drama in Turkey.  Today was especially damaging to the case for correlation as Turkish Lira improved significantly even as US stocks and bond yields sank.  The conventional wisdom has been arguing for the OPPOSITE relationship lately (i.e. weaker Lira pushes bond yields and stock prices lower).  

US markets weren't too troubled by Turkey today.  Rather, it was steep losses in Chinese stocks overnight that correlated most readily with declines in US stocks.  The stock slump prompted a fair amount of bond buying demand.  The trick for bonds was that traders were widely betting on rates moving higher post-Turkish-crisis.  As such the unexpected buying demand set of a wave of short-covering  resulting in a bit of snowball rally in Treasuries.

MBS never get to experience these geopolitical risk-related ups and downs on the same level as Treasuries and today was no exception.  MBS were lucky if they gained half as much as 10yr notes (in terms of PRICE) at any given moment today.  Moreover, the gains really started rolling in just after lenders priced for the morning.  That meant very few positive reprices.


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
101-26 : +0-05
Treasuries
10 YR
2.8587 : -0.0363
Pricing as of 8/15/18 4:00PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
11:13AM  :  Bonds on a Tear as Stocks Slide; Looking Out For a Bounce
8:36AM  :  Very Little Reaction to Stronger Retail Sales Data

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Ted Rood  :  ""Was it over when the Germans bombed Pearl Harbor?""
Matthew Graham  :  "for today anyway... probably"
Sung Kim  :  "2.8605 means it's over mg?"

Economic Calendar
Time Event Period Actual Forecast Prior
Wednesday, Aug 15
7:00 MBA Purchase Index w/e 225.5 233.1
7:00 Mortgage Refinance Index w/e 927.5 927.6
7:00 Mortgage Market Index w/e 335.8 342.5
8:30 Retail Sales (%)* Jul +0.5 0.1 0.5
8:30 NY Fed Manufacturing Aug 25.6 20.00 22.60
8:30 Productivity Preliminary (%) Q2 +2.9 2.3 0.4
8:30 Labor Costs Preliminary (%) Q2 -0.9 0.3 2.9
9:15 Capacity Utilization (%) Jul 78.1 78.2 78.0
9:15 Industrial Production (%) Jul +0.1 0.3 0.6
10:00 NAHB housing market indx Aug 67 67 68
10:00 Business Inventories (% ) Jun +0.1 0.1 0.4
Thursday, Aug 16
8:30 House starts mm: change (%) Jul -12.3
8:30 Building permits: number (ml)* Jul 1.310 1.292
8:30 Housing starts number mm (ml)* Jul 1.260 1.173
8:30 Philly Fed Business Index * Aug 22.0 25.7
8:30 Build permits: change mm (%)* Jul -0.7
8:30 Jobless Claims (k) w/e 215 213