Friday was tense for the bond market, with selling pressure that was just big enough to cause concern about a bigger correction, and buying support that was consistent enough to suggest we still had a chance.  Today's trading quickly proved it was buyers who had better control of the momentum--or did it?

Today's trading certainly proved that yields were willing to go back down, but that may not have as much to do with buying demand as it does with the structure of the market and the exceptionally low volume.  Simply put, it made strong, logical sense to be short bonds on Friday.  After all, yields had rejected a post-Fed rally  by failing to close below 2.02% for 2 straight days despite making it as low as 2.972% on Thursday.  Friday quickly brought 10yr Treasuries back to the 2.06% technical level.  Any higher and the snowball momentum might be going the other way.

As it stands, the snowball is in our favor due to a quick little short squeeze (traders betting on higher yields who are then forced to buy bonds to cover those short bets).  Of course, it takes some measure of buying demand to get a short squeeze started, but it's a lower bar to clear on the lowest volume day in 2 months.  Bottom line: today doesn't tell us much about bigger-picture momentum.  Volatility risks are still in place and we simply got to enjoy a pleasant surprise.  Even then, the surprise was more for Treasuries depending on your lender (some were unchanged from Friday, or even a bit weaker as MBS didn't move much relative to the broader bond market).


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 3.0
100-27 : +0-06
Treasuries
10 YR
2.0180 : -0.0480
Pricing as of 6/24/19 4:58PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
11:24AM  :  Bonds Power Back Into Stronger Territory

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
E S 1.999...come back again now, ya' hear  :  "TB...we have 60,000 -120,000 jobs and they be screaming recession is right around the corner"
Matthew Graham  :  "My comment has no concern for the actual implication of that number--only the one I feel the market would perceive."
Timothy Baron  :  "Since we are at "full" employment already, maybe it would."
Matthew Graham  :  "market won't take 60k as strong, Kap..."
Matthew Graham  :  "RTRS - KAPLAN SAYS MONTHLY JOB U.S. GAINS OF 60,000 TO 120,000 WOULD MEAN 'STRONG' JOBS MARKET"

Economic Calendar
Time Event Period Actual Forecast Prior
Tuesday, Jun 25
9:00 CaseShiller 20 yy (% ) Apr 2.6 2.7
9:00 Monthly Home Price yy (%) Apr 4.9
10:00 New home sales-units mm (ml)* May 0.680 0.673
10:00 Consumer confidence * Jun 131.2 134.1
10:00 New home sales chg mm (%)* May 1.9 -6.9
13:00 2-Yr Note Auction (bl) 40