Remember early 2018 when the fear was compounded by this list of bad actors?

  • increased Treasury issuance to pay for the revenue shortfall in the new tax bill
  • the upside economic/inflation potential created by the new tax bill
  • A Federal Reserve that was increasingly intent on hiking rates and increasingly willing to decrease the size of its balance sheet (aka, bond buying)
  • Foreign central banks that were tiptoeing ever close to their own "taper tantrum" moments

It was enough to send 10yr yields quickly over 3% by May 2018.  Then the Italian political drama reminded markets that things could still go wrong.  Tariff uncertainty added to that sentiment and bonds sneaked through the summertime months without much of a fuss.

Enter September.  We knew September could bring a sea-change to the balance of bond buyers vs sellers and unfortunately, that is exactly what we're seeing.  Analysts and economists alike are a bit stumped by just how bad bonds have gotten this month and this week. 

But again, if we go back to early 2018 and look at the year-end guesses that many of us were making, 3.055% doesn't even seem notable.  It just seems notable coming from an August that saw yields rally moderately down to 2.80%.

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
100-26 : -0-10
10 YR
3.0551 : +0.0541
Pricing as of 9/18/18 4:15PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
11:49AM  :  ALERT ISSUED: Negative Reprice Risk Increasing
10:16AM  :  ALERT ISSUED: Negative Reprice Risk Threshold
9:55AM  :  Back at Weakest Levels After Tariff-Driven Bounce

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Manny Gomes  :  "Stocks on a tear. Pension companies must be doing some serious buying today"
Matthew Graham  :  "today doesn't look much like yesterday"
William Hansen  :  "Around this time yesterday we started to see some improvement. Will it happen again today?"
Dan Draitser  :  "Sea of red huh. Yuck"

Economic Calendar
Time Event Period Actual Forecast Prior
Tuesday, Sep 18
10:00 NAHB housing market indx Sep 67 66 67
Wednesday, Sep 19
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