September continues to be an unfriendly month for bonds, marked by an unfriendly trend that has carried yields almost exclusively higher.  Some of the weakness can be chalked up to pent up selling demand that was on hold through the end of August, but economic data and supply situation (lots of bonds being issued by the time we count corporate debt) are responsible for the lion's share of the movement.  

Case in point, even with trade war fears, geopolitical uncertainty, and the Fed Funds rate rising just as quickly as markets expect, August still managed to offer up the highest readings in years in Manufacturing and Consumer Sentiment.  Core inflation may have missed its forecast, but nonetheless remained over the 2% target.  Wage growth rose to a post-crisis high in year-over-year terms, and the list goes on.

When the economy is churning out those kinds of numbers despite increasingly restrictive monetary policy, it makes sense for rates to continue higher.  Our only ray of hope continues to be the 'oversold' condition in longer-term momentum in 10yr yields.  With the weakness seen early this morning, we're one step closer to a potential bounce.

2018-9-17 open

If that materializes this week, keep in mind that it could be a somewhat shallow bounce as markets may want to hear from the Fed next week before doing anything too aggressive.  There are really no top tier events this week in terms of econ data, although there may be trade-related updates that concern both Canada and China.


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
101-01 : -0-03
Treasuries
10 YR
3.0125 : +0.0185
Pricing as of 9/17/18 9:15AMEST

Tomorrow's Economic Calendar
Time Event Period Forecast Prior
Monday, Sep 17
8:30 NY Fed Manufacturing Sep 23.00 25.60
Tuesday, Sep 18
10:00 NAHB housing market indx Sep 66 67
Wednesday, Sep 19
7:00 MBA Purchase Index w/e 233.5
7:00 Mortgage Refinance Index w/e 884.3
8:30 Building permits: number (ml)* Aug 1.310 1.303
8:30 Housing starts number mm (ml)* Aug 1.235 1.168
8:30 House starts mm: change (%) Aug 0.9
8:30 Build permits: change mm (%)* Aug 0.9
Thursday, Sep 20
8:30 Philly Fed Business Index * Sep 17.0 11.9
8:30 Jobless Claims (k) w/e 210 204
10:00 Exist. home sales % chg (%)* Aug 0.3 -0.7
10:00 Existing home sales (ml)* Aug 5.35 5.34
10:00 Leading index chg mm (%) Aug 0.5 0.6