Government shutdowns make good news.  When risks of a shutdown flare up (especially with today's sort of political theater) it tends to dominate the news coverage.  This creates the risk that shutdown news is perceived to impact bonds in a way that isn't really accurate.  

This was the case today, to some extent.  Shutdown headlines dominated the afternoon news cycle right at a time when bonds were weakening.  So was it the shutdown headlines causing the issues?  Not hardly.  In fact, the shutdown headlines would have arguably been good for bonds. 

Instead, bonds were simply backtracking after having been led into stronger territory by European markets.   The latter were on the move due to the latest round of Brexit-related headlines, which basically conveyed "no additional negotiations" for Theresa May's failed Brexit plan.  Additionally, Sky News reported that british lawmakers in May's party had sent enough letters of no confidence to challenge her leadership.  

In the grand scheme of things, this is the 2nd day of moderate weakness after a stellar run for bonds.  If you have lock/float decisions to make in the short term, keep a close eye on 2.89%, which was tested multiple times today as a ceiling.  2.82% has been similarly firm resistance below.  Next week's Fed announcement is the biggest flashpoint on the horizon, but a lead-off is always possible before that.

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
101-01 : -0-06
10 YR
2.8790 : +0.0230
Pricing as of 12/11/18 5:36PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
2:31PM  :  ALERT ISSUED: Negative Reprice Risk Increasing
10:26AM  :  Bonds Back to Unchanged, Led by Europe

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Brian Chernega  :  "can you lock a few more?"
Jennifer Turner  :  "In case anyone is concerned that the market will deteriorate further, don't worry - I'm about to lock a loan"

Economic Calendar
Time Event Period Actual Forecast Prior
Tuesday, Dec 11
8:30 Producer Prices (%) Nov +0.1 0.0 0.6
8:30 Core Producer Prices YY (%)* Nov +2.7 2.5 2.6
Wednesday, Dec 12
7:00 Mortgage Refinance Index w/e 836.4
7:00 MBA Purchase Index w/e 249.9
8:30 Core CPI Year/Year (%)* Nov 2.2 2.1
8:30 CPI mm, sa (%)* Nov 0.0 0.3
13:00 10-yr Note Auction (bl)* 24