It's been an interesting week so far with trade war developments taking bonds in an unexpected direction unexpectedly quickly and MBS underperforming the rally more than we'd like to see.  Trade war headlines have provided a nearly constant supply of volatility for bond stocks and bonds, and today was no exception.

Late day campaign rally comments from Trump started the ball rolling overnight with more stock losses and bond market gains.  Then early this afternoon, Trump's comments about receiving a letter from Xi were much more upbeat.  They single-handedly turned accounted for the afternoon gains in stocks and losses in bonds. Nonetheless, bonds ended the day with gains.  10yr yields were 3bps lower and Fannie 3.5 coupons managed to hold on to 2 ticks of strength (0.06 points).  

All of the above is well and good, but for several days, it's been tomorrow that serves as the deadline for any sort real news regarding a trade deal.  It's not that we necessarily should expect any concrete resolution to negotiations, but there could be an announcement that marks a meaningful shift in tone, for better or worse.  

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
101-03 : +0-02
10 YR
2.4530 : -0.0300
Pricing as of 5/9/19 4:43PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
1:06PM  :  ALERT ISSUED: Negative Reprice Risk Increasing
12:32PM  :  Bonds Unable to Add to Overnight Gains

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Matthew Graham  :  "There was a big old concession !"
John Tassios  :  "compared to 10 yr - down the middle is pretty good considering no concessions ahead of auction"
Matthew Graham  :  "2.892 vs 2.891 yield, 2.20 vs 2.22 bid-to-cover, 60.5 vs 59.6 indirect. Right down the middle (almost perfectly so)"
John Tassios  :  "how did it go MG?"
Matthew Graham  :  "auction just happened. no major reaction"
John Tassios  :  "nervous with 30 yr auction, no concessions ahead of it"
Matthew Graham  :  "markets are interested"

Economic Calendar
Time Event Period Actual Forecast Prior
Thursday, May 09
8:30 Core Producer Prices YY (%)* Apr +2.4 2.5 2.4
8:30 Producer Prices (%) Apr +0.2 0.2 0.6
8:30 International trade mm $ (bl) Mar -50.0 -50.2 -49.4
8:30 Jobless Claims (k) w/e 228 220 230
8:30 Continued jobless claims (ml) w/e 1.684 1.670 1.671
13:00 30-Yr Bond Auction (bl)* 19