Referring to the week of bond trading as "crazy" is a bit of a stretch.  If we bring stocks into the mix, or if we go back to last Wednesday, it's been a crazy 7 business days (bonds were closed on Monday).  

As you're well aware, stocks were in the spotlight this week and bonds couldn't have looked much less eager to cheer them on.  Granted, bonds did what they were supposed to do--eventually--by rallying in response to a gigantic stock sell-off.  But the net effect is that 10yr yields can only say they ALMOST recovered HALF of the ground lost last week.  The very lowest yields seen today would have been the highest in 7 years on any other week.

But enough of that depressing stuff!  We all know this is a rising rate environment.  And we also know traders are aware of that fact.  A certain amount of an expected future increase in rates is already priced in to current levels, and yet traders remained hesitant to chase the stock move this week.  That suggests a potential imbalance of trading positions that could result in a short squeeze if the right catalyst comes along next week.  It's a long shot, but if that happens, it could create some solid short-term opportunities for those who are ready to take advantage of them.


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
100-04 : -0-05
Treasuries
10 YR
3.1670 : +0.0360
Pricing as of 10/12/18 7:06PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
3:50PM  :  ALERT ISSUED: MBS at Lows; Lock/Float Considerations
8:43AM  :  Weaker Overnight, But Trying to Bounce; No Impact From Data

Economic Calendar
Time Event Period Actual Forecast Prior
Friday, Oct 12
8:30 Import prices mm (%)* Sep +0.5 0.2 -0.6
8:30 Export prices mm (%)* Sep 0.0 0.2 -0.1
10:00 5yr Inflation Outlook (%)* Oct 2.3 2.5
10:00 Consumer Sentiment Oct 99.0 100.4 100.1
10:00 1yr Inflation Outlook (%)* Oct 2.8 2.7
Monday, Oct 15
8:30 Retail Sales (%)* Sep 0.6 0.1