After a series of demoralizing losses, it feels like some small victory for bonds to simply remain sideways today.  That wasn't necessarily a given early this morning.  In fact, yields hit new intraday highs for the week--the highest levels since May.  Move down the curve just a bit and 5yr yields are at the highest levels since 2008--just another victim of the relentless move toward higher short-term rates.

All that to say that the biggest risks to the long-term rate outlook have yet to subside.  Rather, today simply suggests we may finally be leveling off before making the next big decision--something that seems likely to follow next week's Fed Announcement and updated rate hike outlook.

As for specific market movers today, attempting to pin the tail on any particular donkey is a fool's errand.  Stocks surged, but the move was disconnected from rates.  Overseas markets were correlated at times, but not enough to suggest we give them credit as a key motivation. 

In general, it makes most sense to view the past few weeks as some combination of stronger economic data (starting with average hourly earnings in the NFP report), negatively-biased September trade flows, tons of corporate issuance, fear of more Treasury issuance associated with another tax bill, and potentially some ill effects from tax deadline retirement account funding.

From a technical standpoint, we'd need to see 10yr yields break below 3.06% tomorrow and hold those gains in order to confirm today's ceiling potential.  


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
100-26 : +0-01
Treasuries
10 YR
3.0645 : -0.0185
Pricing as of 9/20/18 5:27PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
10:48AM  :  Back to Unchanged as Big Buyers Finally Show Up
8:57AM  :  Little-Changed at Weaker Levels After Data

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Hugh W. Page  :  "Wells Fargo laying off 10% of workforce over next 3 yrs. That's about 26,000 peeps"
Nathan Miller  :  "that non-red color was pretty cool for a minute"
Matthew Graham  :  "All that having been said, we can give the bigger swings in Europe SOME credit at times. This morning might be one of those times"
Matthew Graham  :  "Italian credit spreads are basically flat since 9/10. Meanwhile, what's happened to US 10's in that time?"
Matthew Graham  :  "I wish there was as much correlation between US yields and Italian credit spreads as a few other analysts have emphatically suggested. Sadly, this is one of those red herrings I alluded to yesterday. In fact, Italian spreads have been, first and foremost, a factor of broader European bond market momentum which is, in itself, partly reliant on US bond market momentum."
Caroline Roy  :  "that green is so easy on the eyes"

Economic Calendar
Time Event Period Actual Forecast Prior
Thursday, Sep 20
8:30 Philly Fed Business Index * Sep 22.9 17.0 11.9
8:30 Jobless Claims (k) w/e 201 210 204
10:00 Exist. home sales % chg (%)* Aug 0.0 0.3 -0.7
10:00 Existing home sales (ml)* Aug 5.34 5.35 5.34