As expected, the result of the emergency EU summit overnight was a hefty brexit extension, giving the UK until 10/31 to approve a compromise deal to leave the EU.  At face value, this wasn't the conclusion bonds wanted, because it keeps economic hope alive.  Indeed, there's no doubt that yields would have been down sharply overnight if Britain was told "sorry, no deal... you get a hard brexit!"  But what about next week and the week after? 

It's entirely possible that simply moving PAST the big uncertainty would have hurt bonds more than the overnight extension deal. After all the overnight extension deal only put about 2bps of upward pressure on 10yr yields, and it hurt MBS even less.  At least this way bonds can benefit from the uncertainty that surrounds the October deadline, and we still get the benefit of not having to talk about brexit for another few months!

The 8:30am domestic economic data didn't do bonds any favors, however, with stronger Jobless Claims and Producer Price data adding to the overnight weakness.  The 30yr bond auction was arguably in the same camp, but not excessively so.  When the smoke cleared, 10yr yields were just over 3bps higher on the day and still under 2.50%.  MBS only lost 3 ticks (.09).  10yr notes were down 10  ticks (.31) by comparison.


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 3.5
101-03 : -0-03
Treasuries
10 YR
2.4990 : +0.0220
Pricing as of 4/11/19 6:32PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
8:42AM  :  Bonds Weaker Overnight; Stronger Data Not Helping

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Paul Martin  :  "Only over 85.00 and up"
Scott Valins  :  "25 bps LLPA bump on 2nd homes starting July 1st :("
Matthew Graham  :  "There's a lot of work to be done with rates just half a point lower"
Matthew Graham  :  "yeah BB, I think even the stock market agreed that 10yr yields over 3% sucked"
Brent Borcherding  :  "While there is an obvious bias for lower rates among our fellow Loan Originators...the dire need that once was prevalent here is missing. Which is nice."

Economic Calendar
Time Event Period Actual Forecast Prior
Thursday, Apr 11
8:30 Core Producer Prices YY (%)* Mar +2.4 2.4 2.5
8:30 Producer Prices (%) Mar +0.6 0.3 0.1
8:30 Jobless Claims (k) w/e 196 211 202
13:00 30-Yr Bond Auction (bl)* 16
Friday, Apr 12
8:30 Import prices mm (%)* Mar 0.4 0.6
8:30 Export prices mm (%)* Mar 0.2 0.6
10:00 1yr Inflation Outlook (%)* Apr 2.5
10:00 5yr Inflation Outlook (%)* Apr 2.5
10:00 Consumer Sentiment Apr 98.0 98.4