In the day just past, bond markets put in their first losing session after 3 straight business days moving in a friendlier direction.  Chalk that up to a dearth of new and threatening trade-related headlines, which seem to be this week's preeminent market mover.

In the day ahead there's no reason to expect that theme to change.  Indeed, the overnight session saw fresh headlines right out of the gate with Trump saying China "broke the deal.  They can't do that. So they'll be paying," at a campaign rally in Florida.

European markets took the ball and ran with it at the open.  Italian credit spreads have been adding to broader bond market gains as well.  Risk-off momentum may have gotten another boost from reports that North Korea fired a projectile of some sort just before 4am ET, but most of the overnight rally had run its course by then.

Either way, the risk-off trade dominates.  Chinese equities are down nearly 2%, S&P futures are down roughly 1%, and core global bond yields are sharply lower with 10yr yields down 5bps at 2.435 and German Bunds pressing farther into negative territory.

US econ data is of little use to a market that's trading on fear.  It continues to be the case that bonds are susceptible to a positive headline that smooths over trade war fears.  But with China silent on that topic so far today, all we have to trade on is Trump's threats from the overnight session.  The fact that we're one day away from the new tariffs isn't helping the global risk trade (but that's just what bond bulls wanted).

MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.
FNMA 3.5
101-06 : +0-05
10 YR
2.4390 : -0.0440
Pricing as of 5/9/19 9:11AMEST

Tomorrow's Economic Calendar
Time Event Period Forecast Prior
Thursday, May 09
8:30 Core Producer Prices YY (%)* Apr 2.5 2.4
8:30 Producer Prices (%) Apr 0.2 0.6
8:30 Jobless Claims (k) w/e 220 230
8:30 Continued jobless claims (ml) w/e 1.670 1.671
13:00 30-Yr Bond Auction (bl)* 19