Today's focal point was an anticlimactic can-kicking episode wherein the government shutdown was finally ended, but only for 3 weeks.  The passage of the temporary bill was so well telegraphed that markets had plenty of time to start trading it throughout the day.  Stocks and bond yields edged higher, but not in any exceptionally scary way.  After all, this is just a temporary solution and not the kind that engenders much confidence about a permanent solution.

That said, a permanent solution will, of course, have to come.  Today's temporary solution is evidence that political will can be bent enough to accomplish such things.  I don't really care which side of the aisle bends when it comes to the market reaction.  A permanent shutdown solution connotes pressure on bonds.  Even the temporary solution could add up to more pressure if overseas markets happen to trade it that way early Monday morning.

Combine that with expectations for a dovish Fed announcement on Wednesday and a downbeat jobs report on Friday, and there is some risk that volatility will pick up next week.  Bullish and bearish cases could be made for both stocks and bonds here.  Traders are doing a great job of staying neutral.  The takeaway is that the economic data and earnings are our best indicators for the next leg of momentum.


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
101-22 : -0-03
Treasuries
10 YR
2.7580 : +0.0460
Pricing as of 1/25/19 6:25PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
12:35PM  :  ALERT ISSUED: Negative Reprice Risk Increasing
9:04AM  :  Bonds Weaker Overnight as Europe Progress Stalls

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Matthew Graham  :  "*TRUMP EXPECTED TO ENDORSE SHORT-TERM BILL TO REOPEN GOVT: CBS"
Matthew Graham  :  "i think the laguardia thing spooked bonds because traders were like "oh damn... this is going to accelerate a shutdown resolution""
Chris Stevens  :  "CBS News Chief Washington Correspondent Major Garrett reports that Mr. Trump is expected to back a continuing resolution (CR) to reopen the government for a few weeks. The border security debate will continue during the CR but the move is designed to take the stress off the system and assure federal workers of pay."
Chris Stevens  :  "Some Republicans are starting to break with their party and support the Democratic package...the air traffic issue this morning was said to have been the gasoline on the current fire to get a deal done by the end of the day. A divided govt means diminished possibilities for POTUS."
Matthew Graham  :  "TRUMP EXPECTED TO MAKE SHUTDOWN ANNOUNCEMENT TODAY: POLITICO"