Remember the middle of 2016 when rates managed to make it all the way back in line with all-time lows despite having almost no justification in terms of economic data and policy outlooks?  Those low rates were mostly about Brexit

Something about Brexit is utterly captivating for global financial markets.  When it first happened, there was a bit of an anticlimactic response, largely due to the time window involved in working out the nuts and bolts.  

Now more than 2 years later, we're getting into the more serious phases of the process.  Markets aren't nearly as rattled as they were in 2016, but shifts in potential Brexit outcomes have nonetheless been relevant market movers this week.  In general, they made a case for bond market gains (i.e. lower rates) this morning, and never really reversed that stance throughout the day. 

Stocks, on the other hand, managed to rally in the afternoon.  Bonds have also been keenly interested in the plight of stocks.  Being forced to choose between two guidance givers, as it were, bonds opted to split the difference, rising just slightly in the afternoon to follow stocks, but not so much as to give the impression that Brexit headlines didn't matter.

Whether any of the above remains relevant in the coming days is another matter.  With Thanksgiving coming up next week, US bond market movement is very close to what has historically been a much more random trading pattern for a few days.  The fact that there's no big-ticket data on the calendar tomorrow only compounds that issue.  Playing the range discussed on MBS Live today is a viable strategy (both in the Day Ahead and the Huddle).


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
100-01 : +0-04
Treasuries
10 YR
3.1100 : -0.0100
Pricing as of 11/15/18 5:59PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
2:04PM  :  ALERT ISSUED: At Weakest Levels, Near Early Reprice Risk Threshold
8:39AM  :  No Major Reaction After Post-Holiday Data Glut

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
aaron meyer  :  "Kashkari's comment today to veto Bostic?"
Matthew Graham  :  "FED'S KASHKARI SAYS U.S. RATES ARE PRETTY CLOSE TO NEUTRAL TODAY"
Matthew Graham  :  "RTRS - FED'S KASHKARI REPEATS VIEW THAT HE DOESN'T SEE THE NEED TO RAISE RATES"
Matthew Graham  :  "thing is... they could stop hiking now and it probably wouldn't change the timing of the next downturn much. There's a huge illusion of Fed control when it comes to the timing of market cycles. I don't envy their position though. They will ALWAYS be blamed for doing the wrong thing right before a recession--as if there is some scenario where the recession wouldn't have happened."
Sung Kim  :  "clearly they think they can perfectly manage the economy and it will never contract"
Matthew Graham  :  "they're really talking (in a thinly-veiled way) about when they think they'll be done hiking"
Matthew Graham  :  "correct"
Sung Kim  :  "the stupidity of the whole thing is that the neutral rate, if there is even one, changes on a daily basis and how can they even project that far out?"
Matthew Graham  :  "Bostic is on my naughty list now. Can't say stuff like that as a Fed official. It's not even responsible."
Sung Kim  :  "2.50 - 3.50 is neutral, talk about accuracy"
Matthew Graham  :  "3.5 is OUTRAGEOUS - MG"
Matthew Graham  :  "RTRS - FED'S BOSTIC SAYS ONCE WE GET IN RANGE OF NEUTRAL, WILL NEED TO MONITOR DATA CAREFULLY"
Matthew Graham  :  "RTRS - FED'S BOSTIC SAYS HE SEES NEUTRAL RATE AS BETWEEN 2.5 PCT AND 3.5 PCT"

Economic Calendar
Time Event Period Actual Forecast Prior
Thursday, Nov 15
8:30 Retail Sales (%)* Oct +0.8 0.5 0.1
8:30 Export prices mm (%)* Oct +0.4 0.1 0.0
8:30 Import prices mm (%)* Oct +0.5 0.1 0.5
8:30 Philly Fed Business Index * Nov 12.9 20.0 22.2
8:30 NY Fed Manufacturing Nov 23.3 20.00 21.10
8:30 Jobless Claims (k) w/e 216 212 214
Friday, Nov 16
9:15 Capacity Utilization (%) Oct 78.2 78.1
9:15 Industrial Production (%) Oct 0.2 0.3