In the day just past, bonds and especially stocks remained transfixed by trade-related headlines.  This follows an entire week marked by the same preoccupation.  Yesterday's massive stock sell-off ended being the focal point of the day, and the driving force behind the strong performance in Treasuries.  MBS also made gains, but we would never expect them to be on par with Treasury gains in a situation where investors are seeking safe havens amid "risk-off" trading.

In the day ahead, there isn't much to look forward to in terms of scheduled economic data and events with only the Import/Export price data at 8:30am (almost never a market mover unless it misses/beats in a big way).  

Trade war headlines remain a candidate for market movement, but with China firing its retaliatory salvo yesterday and today saying more conciliatory things, it's hard to imagine a big enough shift in the tone of headlines to get us back into the reactionary position seen over the past week and a half. 

From a strategy standpoint, we can watch the following trend toward lower rates for a breakout.  A break lower is unlikely without new motivation, but a break higher is widely viewed as likely--so much so that it could be a logical contrarian trade to bet in the other direction (i.e. traders buying bonds simply because everyone else is selling).  Key horizontal technical ceilings are also highlighted.

2019-5-14 open


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 : +0-01
Treasuries
10 YR
2.4070 : +0.0020
Pricing as of 5/14/19 8:30AMEST

Tomorrow's Economic Calendar
Time Event Period 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