Bonds were weaker in the overnight session, but only slightly.  The onset of domestic trading saw a stronger contingent of traders lined up to buy bonds at the 8:20am CME open.  The 8:15am ADP data was weaker.  It may have helped a bit, but bonds were keen to wait another 5 minutes before the first noticeable rally of the morning.

We drifted sideways from there until weakness in European and US equities spilled over into a risk-off trade that benefited bonds.  NY Fed's Williams was out with several moderately helpful comments shortly thereafter (discussed in today's Huddle video).

From a technical standpoint, today's modest gains keep yields in the same old range, albeit right in line with the ceiling for the 3rd straight day.  This puts us in a position to rally back into the range in the event that NFP is bond-friendly tomorrow.  Of course if NFP (and/or the average hourly wage data) is much stronger than expected tomorrow, it also leaves us vulnerable to a range breakout.  Either way, the technical landscape seemingly increases the risk of volatility for tomorrow.

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
101-25 : +0-05
10 YR
2.8785 : -0.0235
Pricing as of 9/6/18 4:38PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
8:59AM  :  Bonds Back to Green After Early Data

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Hugh W. Page  :  "Slowdown will come. It's just delayed for now."
Victor Burek  :  "The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2018 is 4.4 percent on September 5, down from 4.7 percent on September 4."
Sung Kim  :  "99% of analysts expect a recession in 2020 so there will be NO recession in 2020"
Tom Schwab  :  "ahem, not soon enough but about six to nine months too late"
Sung Kim  :  "apparently everyone knows this except them"
Oliver Orlicki  :  "SK they will be soon enough"
Sung Kim  :  "no, they are cutting"
Scott Valins  :  "is the Fed still expected to raise this month?"

Economic Calendar
Time Event Period Actual Forecast Prior
Thursday, Sep 06
8:15 ADP National Employment (k)* Aug 163 190 219
8:30 Productivity Revised (%) Q2 2.9 3.0 2.9
8:30 Labor Costs Revised (%) Q2 -1.0 -0.9 -0.9
8:30 Jobless Claims (k) w/e 203 214 213
10:00 ISM N-Mfg Bus Act * Aug 60.7 56.9 56.5
10:00 ISM N-Mfg PMI * Aug 58.5 56.8 55.7
10:00 Factory orders mm (%) Jul -0.8 -0.6 0.7