August was nice.  September is mean... at least if you're a bond.

Investors wanted you in August when it was still unclear whether or not Turkey was going to be a big deal for the global financial system, whether the trade war would spiral out of control, or whether the EU was seeing a disturbing shift in economic data.

What a difference a few weeks makes!  Europe has reversed course, Turkey is "fixed," we've had some very strong econ data, and trade war risks are roughly unchanged (which is positive in and of itself, because it means they're not blossoming into the dire situations feared by some).

Bottom line, no one wants to pay very much for bonds right now.  A moderately big miss in Retail Sales isn't even enough for a token Friday morning rally.  Paradoxically though, a big beat in Consumer Sentiment didn't cause any more damage at 10am.  That suggests ulterior motives behind the scenes. 

We've often wondered aloud if tax deadlines have a random effect on bonds due to retirement account funding deadlines and the fact that retirement funds are some of the biggest bond market players.  If that's the case, things would start looking different as early as next Tuesday (corporate tax deadline Monday).  Maybe just wishful thinking, but with 10yr yields at 3%, we'll take whatever we can get.


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
101-03 : -0-07
Treasuries
10 YR
2.9995 : +0.0355
Pricing as of 9/14/18 4:46PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
4:34PM  :  ALERT ISSUED: No Reason To Wait on Locking
9:57AM  :  ALERT ISSUED: 10yr Over 3.0%; MBS at Lows
8:41AM  :  Retail Sales Missed, and It Didn't Even Matter

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Matthew Graham  :  "
New MBS Huddle Released
Still Plenty Not To Like About Bonds' Reaction To Data"

Economic Calendar
Time Event Period Actual Forecast Prior
Friday, Sep 14
8:30 Export prices mm (%)* Aug -0.1 0.0 -0.5
8:30 Retail Sales (%)* Aug +0.1 0.4 0.5
8:30 Import prices mm (%)* Aug -0.6 -0.2 0.0
9:15 Capacity Utilization (%) Aug 78.1 78.2 78.1
9:15 Industrial Production (%) Aug +0.4 0.3 0.1
10:00 Consumer Sentiment Sep 100.8 96.6 96.2
10:00 1yr Inflation Outlook (%)* Sep 2.8 3.0
10:00 5yr Inflation Outlook (%)* Sep 2.4 2.6
10:00 Business Inventories (% ) Jul +0.6 0.6 0.1