Interestingly enough, the most interesting thing that happened to the bond market today happened in the overnight session.  It accounted for most of the movement, and it brought bonds exactly to the levels seen at the end of the day. 

The event in question was news that Italy would defy EU budget rules in an attempt to stimulate its economy.  This is the sort of thing that gets investors thinking about systemic risk and degradation of the EU monetary system, even if only slightly.  In turn, core EU bonds tend to benefit noticeably, and those gains tend to spill over to US bond markets (which is exactly what happened overnight).

Weaker Retail Sales and Industrial Production added to the bond market gains, but it was ultimately Europe that was in control.  The EU rally bounced in the morning hours and stocks moved higher as well.  All of the above coaxed Treasury yields off their lowest levels, though not above 2.39%, give or take.  In other words, bonds still managed to hold an impressive amount of the gains today (and ALL of the overnight gains) to end at the best levels since late March.  Only one other day has been any better in well over a year (in terms of closing levels anyway).


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
101-12 : +0-05
Treasuries
10 YR
2.3770 : -0.0420
Pricing as of 5/15/19 5:06PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
8:38AM  :  Retail Sales Says "Rally-On" Bonds

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Matthew Graham  :  "It's a respectable 2nd tier report."
Mike Christensen  :  "How big of a market mover is Philly Fed report tomorrow MG? Asking for OO on Lock/Float. You are welcome OO"
Matthew Graham  :  "RTRS - FED'S BARKIN SAYS HIS BUSINESS CONTACTS SAY THE ECONOMY IS SOUND BUT NOT SPECTACULAR, BUT BUSINESS CONFIDENCE IS FRAGILE"
Matthew Graham  :  "RTRS - FED'S BARKIN SAYS HE DOES NOT DISCOUNT THE IDEA 'THAT WE COULD TALK OURSELVES INTO A RECESSION'"
Matthew Graham  :  "RTRS - BARKIN SAYS FED MIGHT WANT TO SIMPLIFY COMMUNICATIONS TOOLS, SUCH AS ITS DOT PLOT"
Matthew Graham  :  "RTRS - FED'S BARKIN SAYS U.S. ECONOMIC DATA LOOK RELATIVELY HEALTHY AFTER SENTIMENT SHOCK LATE LAST YEAR"
Matthew Graham  :  "RTRS - FED'S BARKIN SAYS IT MAKES SENSE TO REMAIN PATIENT ON RATE OUTLOOK GIVEN CURRENT U.S. ECONOMIC CLIMATE"
Ted Rood  :  "email your secondary desks a snip of MBS chart, they always appreciate fielding questions regarding pricing discrepancies."
Dan Draitser  :  "Green yet pricing is worse this morning than yesterday?"

Economic Calendar
Time Event Period Actual Forecast Prior
Wednesday, May 15
7:00 MBA Purchase Index w/e 268.5 270.2
7:00 Mortgage Refinance Index w/e 1232.6 1238.5
8:30 Retail Sales (%)* Apr -0.2 0.2 1.6
8:30 NY Fed Manufacturing May 17.8 8.50 10.10
9:15 Capacity Utilization (%) Apr 77.9 78.7 78.8
9:15 Industrial Production (%) Apr -0.5 0.0 -0.1
10:00 NAHB housing market indx May 66 64 63
10:00 Business Inventories (% ) Mar 0.0 0.0 0.3