Bonds had a couple options to choose from today when it came to potential market movers.  As far as known quantities, we knew there would be a speech from Fed Chair Powell (maybe he would clarify last week's inflation comments?) and also a big corporate bond deal from Comcast. 

Neither of the 'on-the-radar' events had much of an impact.  Maybe they would have had it not been for a moderate dose of Italian drama setting the tone in the overnight session.  Simply put, the head of the budget committee in Italy's lower house of parliament said Italy could only solve its problems if it left the Eurozone (i.e. just dropping the currency, not the membership in the EU).  

This resulted in a fairly noticeable rally in core European bond markets which then spilled over into US markets.  It wasn't huge, because frankly, the guy in question isn't in charge of Italy.  On top of that, he quickly issued a retraction that framed the comments as his opinion and not an indication of official policy.   With that, bonds bounced back toward higher yields until the 9:30am NYSE open allowed another batch of traders to get in on the trade.  

The net effect was underwhelming, with yields hitting a floor around 3.047% and then edging back up to 3.05+.  That's not enough of a victory to say that the current range of 3.06-3.09 is broken.  Even if the gains were bigger, we'd still be giving a wide berth to the upcoming economic data with the widest eye on Friday's wage growth numbers.


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
100-32 : +0-03
Treasuries
10 YR
3.0557 : -0.0243
Pricing as of 10/2/18 4:20PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
1:01PM  :  Powell Speech a Complete Non-Event
9:21AM  :  Stronger, But Off Best Levels; Who is Borghi?

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Matthew Graham  :  "RTRS - FED'S POWELL: INFLATION RISE ABOVE TARGET WOULD NOT CAUSE FED TO SELL ASSETS"
Matthew Graham  :  "RTRS - FED'S POWELL: NOT YET SEEING EFFECTS FROM U.S. TRADE POLICY"
Matthew Graham  :  "RTRS - FED'S POWELL: STILL ROOM FOR U.S. FISCAL POLICY TO SUPPORT DEMAND"

Economic Calendar
Time Event Period Actual Forecast Prior
Tuesday, Oct 02
9:45 ISM-New York index * Sep 822.0 810.7
Wednesday, Oct 03
7:00 Mortgage Market Index w/e 352.5
8:15 ADP National Employment (k)* Sep 185 163
10:00 ISM N-Mfg PMI * Sep 58.0 58.5
10:00 ISM N-Mfg Bus Act * Sep 60.3 60.7