Rates were flat to start the overnight session and didn't bat an eyelash at initial strength in equities markets during Asia-only trading hours.  Things changes when European trading got underway with the sizable jump in the DAX (German stocks) coinciding with the first selling streak of the day in US Treasuries. 

Even then, yields never went any higher than yesterday's highs before correcting a bit.  We actually touched unchanged levels at 5:53am, but it was all uphill from there.  Without any clear correlation to an event, headline, or related market, bond selling picked up aggressively just after 8am (when a majority of domestic traders begin their trading day).  The 10 minutes of volume following the 8:20am CME open dwarfed any other 10 minute block of the day, suggesting that traders were in line to sell bonds regardless of any outside motivation.

This is both a good and bad thing.  It's bad in the sense that it created the highest yields in nearly a month and because it perpetuates an unfriendly trend.  It's good (potentially) if the source of the volume was traders closing positions ahead of a holiday weekend.  If that's the case, those long positions (good for bonds) that could come back into the market next week.  

But all of the above assumes that position-squaring is a dominant force in the move.  We have no way to confirm that yet.  The next major unknown we can confirm will be the extent to which bonds are bracing for impact from Chinese economic data overnight.  With several big reports due out, it could be the case that traders were getting a jump on another Chinese data surprise.  If the data falls far from forecast, the bond market's reaction will tell us a lot about just how closely traders are watching the 'global growth' narrative.


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
100-20 : -0-05
Treasuries
10 YR
2.5920 : +0.0390
Pricing as of 4/16/19 5:10PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
11:26AM  :  ALERT ISSUED: MBS at Lows; Some Negative Reprice Risk For a Few Lenders
8:54AM  :  Risk-On Rally Helping Stocks, Hurting Bonds

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Hugh W. Page  :  "Don't hold your breath..."
Michael Dormer  :  "3th'd."
Dominick Cordone  :  "2nd'd"
Timothy Baron  :  "I could just use another quick dip into the 2.40s to grab some refi stragglers."
Matthew Graham  :  "maybe you we should stop pointing out defensive barriers. It seems to only anger the market"
Ted Rood  :  "smack at the 50 day moving average for treasuries and MBS."
Matthew Graham  :  "oh no. that would take days"
Jason Anker  :  "are we above the green ceiling now?"

Economic Calendar
Time Event Period Actual Forecast Prior
Tuesday, Apr 16
9:15 Capacity Utilization (%) Mar 78.8 79.1 78.2
9:15 Industrial Production (%) Mar -0.1 0.2 0.1
10:00 NAHB housing market indx Apr 63 63 62
Wednesday, Apr 17
7:00 MBA Purchase Index w/e 278.1
7:00 Mortgage Refinance Index w/e 1582.6
10:00 Wholesale inventories mm (%) Feb 0.5