What would you expect to care more about Chinese economic data: the US bond market or the Chinese stock market?  Option 2?  Good, I agree.

Now, if you said that US bond yields and Chinese stocks were moving higher together in response to strong Chinese economic data, I could also agree with that, but I hope we could both agree that any subsequent reversal in Chinese stocks would be worth at least something to US bonds.

That's what happened overnight.  In fact, by 4am, Chinese equities had given back almost all of their gains from Friday.  But Treasuries didn't even seem to notice.  Granted, we could certainly say that Friday's moves were driven by economic data and today's were due to "something else," except of course when the first sentence of today's Reuters Asia markets recap reads like this:

"Hong Kong stocks ended lower on Monday, as signs of slowing China and global economic growth offset optimism related to trade talks and a jump in bank lending in China."

Incidentally, that "bank lending" thing was what Friday was all about, ostensibly.  Long story short, markets are asking you to believe the "opposite of something that hurts you" doesn't help you.  I don't like that logic, but markets are fickle and often not so cut and dried.  All of the above makes Tuesday night's Chinese economic data somewhat interesting (assuming it has an impact on China, of course).  

Meanwhile, back in the US, bonds look like they might have encountered some support at 2.57%+ but also look to be respecting resistance at 2.55%.  I don't think we can rule out a willingness for rates to move even higher until we see some decisive move in the other direction.


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
100-25 : +0-00
Treasuries
10 YR
2.5560 : -0.0040
Pricing as of 4/15/19 6:14PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
12:33PM  :  Quiet Monday; Bonds Trying to Hold Near 'Unchanged'

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
E S  :  "I think Jamie Dimon said the same thing a few days ago, do you think anyone was listening?"
Brent Borcherding  :  "Only one thing needs for inflation to pick up. Fed needs to incentivize banks to lend and not sit on capital."
John Tassios  :  "with more world connectivity, competition, evolving technology efficiencies, sluggish aggregate demand curve post 2008, growing gov debt loads, and aging demographics - inflation will remain subdued for another decade or two. CB's will have to adjust to holding increasing bal sheets more than ever to keep any kind of economic momentum going. Look at late 2018 as an example of stock mkt tanking when Powell mentioned bal sheet reduction is on autopilot. Markets are now to the point of not properly functioning without CB's balance sheet injections. @2cents"
Matthew Graham  :  "RTRS - FED'S EVANS SAYS FED POLICY HAS BEEN SUCCESSFUL IN ACHIEVING MAXIMUM EMPLOYMENT, LESS SO ON INFLATION OBJECTIVE"
Matthew Graham  :  "RTRS - FED'S EVANS SAYS SAYS HE IS CONCERNED ABOUT DOWNSIDE MISSES ON INFLATION"

Economic Calendar
Time Event Period Actual Forecast Prior
Monday, Apr 15
8:30 NY Fed Manufacturing Apr 10.1 6.70 3.70
Tuesday, Apr 16
9:15 Capacity Utilization (%) Mar 79.1 78.2
9:15 Industrial Production (%) Mar 0.2 0.1
10:00 NAHB housing market indx Apr 63 62