Trade war trading struck back today, just when you thought you'd seen the last of it on Friday.  In this installment, news stories about various responses from China drove markets to dump stocks and buy bonds overnight.  In turn, that trading precipitated a snow-ball of short covering in bonds.

But more than anything, it was the move lower, and ultimate technical breakout in stocks that set the tone for the day.  Stocks had been holding somewhat sideways with respect to last week's range, but things began to change as domestic trading hours begin.  The process was sped along by news that China was slapping retaliatory tariffs on US imports, and again by the flood of liquidity and volume at the 9:30am NYSE open.

After trying to recover for a few minutes, stocks broke below Friday's lowest levels, thus precipitating technical follow-through that saw the S&P drop roughly 70 points on the day.  10yr yields dropped 7bps, and Fannie 3.5 MBS gained 7 ticks (0.22).  


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
101-08 : +0-07
Treasuries
10 YR
2.4030 : -0.0520
Pricing as of 5/13/19 5:24PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
8:42AM  :  ALERT ISSUED: Bonds Stronger Overnight, Before Most China Headlines

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Timothy Baron  :  "It's a tougher call than usual, IMO."
Timothy Baron  :  "Devil's advocate here. Lock desks are gonna want confirmation of this move before passing on much of the gains. And markets could quickly reverse course based on a headline before that confirmation comes."
Ted Rood  :  "No way in hell I'd lock today. Doubt the majority of these gains have been passed along yet"
Ted Rood  :  ""Tariff related gains could be transitory.""
Ted Rood  :  "bulk of the gains were at the open"
Jeffrey Kanagur  :  "I dont understand why we're not seeing more reprices"

Economic Calendar
Time Event Period Actual Forecast Prior
Tuesday, May 14
8:30 Import prices mm (%)* Apr 0.7 0.6
8:30 Export prices mm (%)* Apr 0.5 0.7