This week's big to-do had been and continues to be tomorrow's Fed announcement, press conference, and updated forecasts.  The Fed's European counterpart threw a bit of a curve ball today as Mario Draghi unleashed a barrage of bond-friendly comments overnight with the gist being the essential guarantee of further easing from the ECB.  

Unsurprisingly, bonds enjoyed Draghi's little surprise.  10yr yields were pulled all the way down to 2.017% at the day's lowest levels.  They looked willing to hold in that territory as well.  It wasn't until Trump tweeted about promising trade talk developments with China that rates gave up roughly half their gains to end the day perfectly in line with the bottom of the sideways range we've been following (2.06% in terms of 10yr yields).

Nothing has changed with respect to the risks and opportunities presented by tomorrow's Fed-related events.  This is one of the most important Fed meetings in years as it's the first legitimate chance for us to get a hint about a massively important shift in monetary policy (i.e. a shifting of the gears from "hiking" to "cutting").

MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.
FNMA 3.0
100-14 : +0-06
10 YR
2.0580 : -0.0280
Pricing as of 6/18/19 5:33PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
9:47AM  :  ALERT ISSUED: Bonds Losing Ground Quickly After Trump Tweet
8:18AM  :  Bonds Surge as Draghi Preps Markets For More Stimulus

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Matthew Graham  :  "What those guys said"
Steve Stone  :  "3.5 would be rates between 4.25 and 4.625"
Steve Stone  :  "Based on today's pricing looking at Wells Fargo Mandatory, 3 coupon would best-ex for not rates between 3.75% and 4.125%"
Ira Selwin  :  "Bob - no impact really - you're seeing the single security now"
Bob Bowman  :  "Do we anticipate different lenders pricing off of different instruments and will this cause some disparity in agency pricing from one shop to the next?"
Bob Bowman  :  "question for MG. Right now the 3.0 FNMA coupon will give us the best translation to what we see on on rates sheets .. correct? With the new single security platform for Fannie / Freddie -- when does that become relevant to start to track that and would be looking at 3.0 on that as well?"
Matthew Graham  :  "In that case, probably trade deal, but that's not a high-confidence opinion. It could really go either way."
E S 1.999  :  "So, if FOMC Policy statement is more dovish but no rate cut and Fed Chair Powell sticks to the script of the Fed is data dependent and doesn't telegraph a rate cut in July AND Trump-Xi agree to a framework of a trade deal at the G-20 that includes something about IP protection, having to partner with a local company, what in your opinion would be more impactful?"
Matthew Graham  :  "Depends who says what. I think proof is in pudding on trade deal, so pound for pound, I'd give the edge to the Fed"
E S 1.999  :  "MG, what do you think is going to have more impact on Bond Markets/Equity Markets, the FOMC Decision and Fed Chair Powell Press Conference tomorrow or the Trump-Xi meeting at the G-20?"

Economic Calendar
Time Event Period Actual Forecast Prior
Tuesday, Jun 18
8:30 House starts mm: change (%) May -0.9 5.7
8:30 Building permits: number (ml)* May 1.294 1.296 1.290
8:30 Housing starts number mm (ml)* May 1.269 1.239 1.235
8:30 Build permits: change mm (%)* May 0.3 0.2